If One of Two Countries Has an Absolute Advantage in the Production

question 6

Multiple Choice

If one of two countries has an absolute advantage in the production of every commodity, then:

• A)there is no comparative advantage and therefore no trade.
• B)trade would be profitable for the inefficient country, but not for the efficient one.
• C)trade would be profitable for the efficient country, but not the inefficient one.
• D)total world production cannot be increased by specialization and trade.
• E)none of the above are true.

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Definitions:

Pygmalion Effect

The phenomenon whereby higher expectations lead to an increase in performance; a form of self-fulfilling prophecy.

Expectations

Beliefs about the way events or actions will unfold based on previous experiences or societal standards.

Performance

The manner in which an individual or group executes or accomplishes a task, job, or function measured against preset known standards.

Attribution Management

A technique in marketing focused on identifying and assigning value to various marketing efforts to understand their contribution to a goal, such as sales or conversions.