A Country Is Said to Have an Absolute Advantage in the Production

question 50

Multiple Choice

A country is said to have an absolute advantage in the production of a good when:

• A) its opportunity cost of producing the good is lower than another country.
• B) it can produce the good using less resources than another country.
• C) it specialises in the production of the good.
• D) its opportunity cost of producing the good is higher than another country.

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Definitions:

Taxes

Mandatory financial charges imposed by governments on individuals, businesses, or transactions to fund public expenditure.

Transfers

Movements of income or wealth without the exchange of goods or services, such as grants, subsidies, or remittances.

Income Mobility

The ability of individuals or households to move across different income levels or brackets over time.