Suppose England Has a Comparative Advantage Over the United States

question 66

Multiple Choice

Suppose England has a comparative advantage over the United States in producing tea.If this is true,then:

• A) England should produce more tea than it wants and sell the rest to the United States.
• B) England should produce a small amount of tea and buy the rest of the tea it wants from the United States.
• C) England should not produce tea, and should instead buy it all from the United States.
• D) the United States has nothing to gain from buying tea from England.

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Definitions:

Marginal Revenue Product

Marginal Revenue Product is the additional revenue generated from using one more unit of a resource or factor of production, holding other factors constant.

Competitive Firm

A company that operates in a market where there are many buyers and sellers, and it has little to no power to set prices for its products or services.

Union Membership

The state of individuals being members of a labor union, which is an organization intended to represent the collective interests of workers in negotiations with employers.

Rate of Unionization

The percentage of workers who are members of a union within a specific industry, sector, or economy.