Which of the Following Statements About Comparative Advantage Are True

question 120

Multiple Choice

Which of the following statements about comparative advantage are true?
1) A country's pattern of comparative advantage depends partly upon the relative abundance of different types of resources in its endowment of factors.
2) Trade allows small countries to reap economies of scale through specialization.
3) Climate affects a country's pattern of comparative advantage.

• A)1 and 2
• B)2 and 3
• C)1,2,and 3
• D)1 only
• E)2 only

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Definitions:

Units Of Good

The quantifiable measure of a product or service that is produced by a company.

Utility Function

An expression that quantitatively describes how consumer preferences are ordered, indicating the level of happiness or fulfillment they derive from various goods or services.

Indifference Curves

Graphical representations used in microeconomics to illustrate different combinations of two goods among which a consumer is indifferent in terms of utility or satisfaction.

Preferences Convex

A characteristic of consumer choices where combinations of goods are preferred over extreme options, illustrating a desire for variety.