Canada and the U

question 134

Multiple Choice

Canada and the U.S.both produce wheat and computer software.Canada is said to have the comparative advantage in producing wheat if

• A)Canada requires fewer resources than the U.S.to produce a bushel of wheat.
• B)the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.
• C)the opportunity cost of producing a bushel of wheat is lower for the U.S.than it is for Canada.
• D)the U.S.has an absolute advantage over Canada in producing computer software.

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Definitions:

Economic Profit

The gap between the complete income and all expenses, covering overt and hidden costs.

Minimum Wage

A price floor set for the price of labor.

Cost Curves

Graphs that depict the relationship between the cost of producing goods and the quantity produced.

TR

Total Revenue, the total income received by a firm from sales before any expenses are subtracted.