When Does a Country Have a Comparative Advantage in the Production

question 107

Multiple Choice

When does a country have a comparative advantage in the production of a good?

• A) when they can produce it at a lower dollar cost
• B) when they produce it using more labour and less capital
• C) when they can produce it at a lower opportunity cost
• D) when they produce it using fewer natural resources

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Definitions:

Binomial Random Variable

A type of random variable that represents the number of successes in a sequence of n independent experiments.

Normal Approximation

A method used in statistics to approximate a binomial distribution with a normal distribution when the sample size is large and the probability of success is not too close to 0 or 1.

Cumulative Binomial Probabilities

The sum of probabilities of achieving a given number of successes in a fixed number of Bernoulli trials.

Relative Frequency

The ratio of the number of times a specific value or event occurs to the total number of occurrences in a given dataset.