Suppose That Only Two Goods Are Produced in an Economy

question 8

Multiple Choice

Suppose that only two goods are produced in an economy.If a country possesses the comparative advantage in the production of one good:

• A)then it must also possess the comparative advantage in the production of the other good.
• B)then it must also possess the absolute advantage in the production of that good.
• C)then it cannot also possess the comparative advantage in the production of the other good.
• D)then it cannot also possess the absolute advantage in the production of that good.

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Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholder equity at a specific point in time, offering a snapshot of its financial condition.

Stockholder

An individual or entity that owns shares in a corporation and therefore has a claim on part of its assets and earnings.

Share Price

The price of a single share of a company's stock in the stock market.

Consistent Dividends

Regular and predictable payments made by a company to its shareholders out of its profits.