Assume That Spain Has a Comparative Advantage in Fish and Germany

question 196

Multiple Choice

Assume that Spain has a comparative advantage in fish and Germany has a comparative advantage in cars.What will happen if these two countries specialize and trade according to their comparative advantage

• A)All individuals in both countries will benefit.
• B)Spain will specialize in and export cars.
• C)Germany will produce more cars than fish in the absence of trade.
• D)Germany will produce more fish than cars in the absence of trade.

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Definitions:

Credit

Refers to the ability of a consumer or business to borrow money with the promise to repay it, along with any agreed upon interest, at a later date.

Channel Conflict

This arises when different sales channels (such as online and brick-and-mortar stores) for the same product compete with each other, potentially undermining sales or brand coherence.

Horizontal

Relating to the expansion or operation across the same level or stage in the supply chain, industry, or market, often involving partnerships or mergers.

Vertical

Pertains to a market or industry structure where the production process, from raw materials to final product delivery, is integrated within a single company or closely controlled through a chain of ownership.