Country a Can Produce Product X, but It Can Also

question 68

Multiple Choice

Country A can produce product X, but it can also buy it at a cheap rate from Country B. Which of the following courses of action is suitable in this situation according to Adam Smith's theory of absolute advantage?

• A) Country A should import product X from country B and it should not attempt to produce it at home.
• B) Country A should partly import the product and produce it domestically.
• C) Country A should produce more of product X and should attempt to obtain an absolute advantage for the product.
• D) Country A should subsidize the production of product X to obtain an absolute advantage over country B.

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Definitions:

Peak Experiences

Intense moments of self-fulfillment and happiness where one feels a sense of wholeness and satisfaction.

Peak Performance

Achieving the highest level of performance capability of an individual or group, often under specified conditions.

Flow

A state of intense focus and immersion in activities, where individuals lose sense of time and self, often leading to high levels of productivity and creativity.

Elitist

a term used to describe a person or class of people considered to be superior to others, often in terms of intellect, wealth, or social status.