If a Country Possesses the Absolute Advantage in the Production

question 32

Multiple Choice

If a country possesses the absolute advantage in the production of one good:

• A) then it must also possess the absolute advantage in the production of the other good.
• B) then it must also possess the comparative advantage in the production of both goods.
• C) then it must also possess the comparative advantage in the production of the other good.
• D) it can produce more of that good given the same resources.

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Definitions:

Inductive Reasoning

A method of reasoning in which specific observations or data are analyzed to form a general conclusion or principle.

Formal Operational

The stage of cognitive development, as per Jean Piaget's theory, starting from about age 12 during which people begin to think logically about abstract concepts.

Cognitive Development

The study of how thinking, problem solving, and intelligence change and mature throughout life, especially during childhood.

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.