Suppose Rose Has a Comparative Advantage Over Sam in Programming

question 115

Multiple Choice

Suppose Rose has a comparative advantage over Sam in programming rather than in sales. If Rose sold programs rather than write them, then she would

• A)sacrifice her programming time and her profits would rise.
• B)not sacrifice her programming time and her profits would rise.
• C)sacrifice her programming time and her profits would fall.
• D)not sacrifice her programming time and her profits would fall.
• E)not sacrifice her programming time because she could make just as much profits by selling as she could by programming.

---

Definitions:

Free Trade

Free trade is an economic policy that allows goods and services to be bought and sold across international borders with little to no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Domestic Supply

The total amount of goods and services produced within a country's borders available for consumption or export.

Domestic Demand

The sum of all requests for goods and services in a country.

World Price

The international market price of a commodity, determined by global supply and demand.