Refer to the Information Provided in Figure 20

question 230

Multiple Choice

Refer to the information provided in Figure 20.2 below to answer the question(s) that follow. Figure 20.2
-Refer to Figure 20.2. England has

• A) a comparative advantage in producing trucks.
• B) an absolute advantage in producing cars.
• C) a comparative advantage in producing cars.
• D) no comparative advantage in producing either cars or trucks.

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Definitions:

Marginal Cost

The expense associated with creating an extra unit of a product or service.

Marginal Benefit

The further satisfaction or value an individual gains from consuming an extra unit of a certain product or service.

Optimal Quantity

The amount of a good or service that achieves the best balance between cost and benefit.

Sunk Cost

Expenses that have already been incurred and cannot be recovered, which should not influence current or future business decisions.