If Country a Has a Comparative Advantage in the Production

question 91

Multiple Choice

If country A has a comparative advantage in the production of good X over country B, then

• A)country A also has an absolute advantage in the production of this good.
• B)the opportunity cost of producing X in country A is higher than in country B.
• C)the opportunity cost of producing X in country A is lower than in country B.
• D)the opportunity cost of producing X in country A is higher or lower than in country B.

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Definitions:

Common Stock

Equity ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Stock Split

A corporate action that increases the number of a company’s outstanding shares by dividing each share, which in turn reduces the price per share.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is the legal capital per share.

Market Value

The current quoted price at which an asset or service can be bought or sold in an open market.