When One Country Can Produce a Given Amount of a Good

question 65

Multiple Choice

When one country can produce a given amount of a good using fewer inputs than any other country,

• A)It has an absolute advantage in producing the good.
• B)It has a comparative advantage in producing the good.
• C)Specialization will definitely increase worldwide consumption possibilities.
• D)Specialization will definitely increase worldwide production possibilities.

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Definitions:

Calls

Financial instruments giving the holder the right to buy a stock or commodity at a specified price within a specific time period.

Variable Costs

Expenses that vary directly with the level of production or output.

Variable Cost

Expenses that change in direct proportion to the amount of business or production activity.

Variable Cost Per Unit

The cost that varies with the level of output or activities, calculated on a per-unit basis.