Identify the Truthfulness of the Following Statements

question 25

Multiple Choice

Identify the truthfulness of the following statements.
I. If country A has a comparative advantage over country B in the production of good X, then the opportunity cost of producing good X in country A is lower than in country B.
II. If country A has a comparative advantage over country B in the production of good X, then country A cannot gain from trade with country B.

• A) Both I and II are true.
• B) Both I and II are false.
• C) I is true; II is false.
• D) I is false; II is true.

Recognize the factors that can shift the PPC inward or outward, signifying changes in an economy's potential output.

Identify the opportunity costs associated with various production choices and their relevance to economic decision-making.

Apply the principles of comparative advantage and specialization to analyze potential gains from trade.

Grasp the role of technological advancements and resource allocation in influencing an economy's production capabilities.

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Definitions:

iPads

A brand of tablet computers designed and marketed by Apple Inc., known for their touch screen interface and mobile operating system.

Supply Analysis

The examination of factors that influence the quantity of a product or service that the market can offer at various prices.

Equilibrium Price

The cost point where the amount of a product sought by buyers matches the amount made available by sellers, leading to a state of equilibrium in the market.

Milk Producers

Entities or individuals engaged in the production and supply of milk.