If There Are Two Goods and Two Countries, Then One

question 79

Multiple Choice

If there are two goods and two countries, then one country can have

• A) an absolute advantage in only one good.
• B) an absolute advantage in both goods.
• C) a higher opportunity cost of producing both goods.
• D) a lower opportunity cost of producing both goods.

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Definitions:

Socially Optimal Output

The level of production of goods and services that leads to the maximum possible economic efficiency and welfare in society, considering both benefits and costs.

Ceiling Price

A legally established maximum price that can be charged for a good or service, intended to protect consumers.

Pure Monopolist

A single seller in a market that sells a product for which there are no close substitutes, controlling the entire supply and influencing price.

Near-Monopoly

A market structure where one company dominates the market to such an extent that it nearly eliminates all competition.