Natural Disasters Like Severe Earthquakes Are Devastating to the Economy

question 185

Multiple Choice

Natural disasters like severe earthquakes are devastating to the economy as well as to the individuals harmed due to

• A) supply shocks.
• B) demand shocks.
• C) demand-pull inflation.
• D) demand-pull deflation.

---

Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, facilitating beneficial trade and specialization.

Absolute Advantage

The ability of a party to produce more of a good or service than competitors, using the same amount of resources.

Free Trade

The absence of tariffs, quotas, or other governmental restrictions on international trade, allowing goods and services to move freely across borders.

Opportunity Cost

Signifies the advantages that a person, investor, or company forgoes by selecting one option instead of another.