When a Country Loses Its Comparative Advantage in the Production

question 114

Multiple Choice

When a country loses its comparative advantage in the production of a good it:

• A) should stop trading and become self-sufficient.
• B) will gain the comparative advantage in the production of another good.
• C) will become a loser in trade in the long run.
• D) will still have the absolute advantage in the production of the good.

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Definitions:

Lessee

A lessee is a person or entity who rents land or property from a lessor under the terms of a lease agreement.

Lessor

The party in a lease agreement who owns the asset and grants its use to another party (the lessee) for a specified period in exchange for payment.

Leveraged Lease

The lessor borrows a portion of the funds needed to buy the equipment to be leased.

Lessee's Standpoint

A perspective focusing on the rights, obligations, and financial impacts on the individual or entity that leases an asset from another.