A Nation Has a Comparative Advantage in the Production of Cars

question 118

Multiple Choice

A nation has a comparative advantage in the production of cars over another nation if:

• A)it can produce cars with fewer resources than the other country.
• B)it can produce cars at a lower opportunity cost than the other country.
• C)it can produce cars at a higher opportunity cost than the other country.
• D)it can produce cars at the same opportunity cost and its consumers have a stronger preference for cars than consumers in the other country.
• E)it is more self-sufficient in all areas of production, including automobile manufacturing.

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Definitions:

Progressive Tax

A taxation system where the tax rate increases as the taxable income increases, typically placing a higher burden on higher-income earners.

Tax Schedules

Detailed charts or tables provided by tax authorities that outline the rates at which taxes are levied on different levels of income or taxable activities.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation according to governing laws.

Infinite Elasticity

A theoretical situation where the quantity demanded or supplied of a product responds infinitely to changes in price; essentially, the smallest price change can lead to an unlimited demand or supply.