Comparative Advantage Is Determined by

question 50

Multiple Choice

Comparative advantage is determined by

• A)actual differences in labor productivity between countries.
• B)relative differences in labor productivity between countries.
• C)Both A and B.
• D)Neither A nor B.

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Definitions:

Total Product

The total quantity of output produced by a firm over a given period of time.

Average Product

The output per unit of a particular input, calculated by dividing total output by the quantity of inputs.

Labor

Human effort, either physical or mental, used in the production of goods and services.

Average Product

The output per unit of input, calculated by dividing the total output by the number of units of the input.