In the Real World We Don't Observe Countries Completely Specialising

question 87

Multiple Choice

In the real world we don't observe countries completely specialising in the production of goods for which they have a comparative advantage.One reasons for this is

• A)comparative advantage works better in theory than in practice.
• B)some countries have more resources than other countries.
• C)tastes for many traded goods are similar in many countries because of globalisation.
• D)production of most goods involves increasing opportunity costs.

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Definitions:

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Price-cost Margins

The difference between the selling price of a product and its production cost, indicating the profit margin per unit sold.

Beverage Merger

A process where two or more companies producing drinks agree to operate as a single business entity, usually to enhance market share, efficiency, or competitiveness.

DS Services of America

A beverage company that specializes in water delivery and coffee service to homes, offices, and retail establishments in the United States.