Which of the Following Is a Statement That Supports the Theory

question 15

Multiple Choice

Which of the following is a statement that supports the theory of comparative advantage?

• A) International trade is a zero-sum gain where one nation's gain is another's loss.
• B) Domestic industries are at risk when a country engages in free trade.
• C) A country should maintain trade surplus to succeed in global trade.
• D) Global production is greater with free trade than it is with restricted trade.

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Definitions:

Output

The quantity of goods or services produced within a given time frame by a firm, industry, or country.

Long-Run Supply

The time period in which all factors of production and costs are variable, allowing firms to fully adjust to market conditions.

Curve

In economics, this refers to a graphical representation depicting the relationship between two variables, such as supply and demand.

Short Run

A period in economics where at least one input is fixed, limiting the ability of a business to adjust production levels.