If Nation a Can Produce 5 Units of Good X

question 28

Multiple Choice

If nation A can produce 5 units of good X or 10 units of good Y and nation B can produce 4 units of good X or 12 units of good Y we can conclude that nation A has a

• A) Comparative advantage in X and an absolute advantage in Y
• B) Comparative advantage in X and an absolute advantage in X
• C) Comparative advantage in Y and an absolute advantage in X
• D) Comparative advantage in Y and an absolute advantage in Y

---

Definitions:

Decimal Places

The number of digits to the right of the decimal point in a number, significant in precision of measurements and calculations.

Percent Increase

The ratio of the increase in value to the original value, expressed as a percentage.

Base Value

The initial point of reference for measuring changes or calculations, such as a starting level in financial indices or a fixed value in property assessments.

Percent Decrease

A measure of the reduction in amount or size of something expressed as a percentage.