If with One Hour of Labor Time Nation a Can

question 4

Multiple Choice

If with one hour of labor time nation A can produce either 3X or 3Y while nation B can produce either 1X or 3Y (and labor is the only input) :

• A)nation A has a comparative disadvantage in commodity X
• B)nation B has a comparative disadvantage in commodity Y
• C)nation A has a comparative advantage in commodity X
• D)nation A has a comparative advantage in neither commodity

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Definitions:

Optimal Quantity

The ideal amount of a good or service that achieves the best possible outcome or utility for a consumer or company, balancing cost and benefits.

Minimum Variable Cost

The lowest point on the curve where a firm covers all its variable costs of production without considering fixed costs, often relevant in short-run output decisions.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity has the power to significantly influence market prices.

Firm

An organization that utilizes resources to produce goods or services for profit.