Assume That Greece Has a Comparative Advantage in Fish and Germany

question 50

Multiple Choice

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars.Also assume that Germany has an absolute advantage in both fish and cars.If these two countries specialize and trade so as to maximize the benefits of specialization and trade,then

• A)the two countries' combined output of both goods will be higher than it would be in the absence of trade.
• B)Greece will produce more fish than it would produce in the absence of trade.
• C)Germany will produce more cars than it would produce in the absence of trade.
• D)All of the above are correct.

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Definitions:

Automated Production

Automated production involves the use of various technologies and machinery to streamline production processes, reducing human intervention and increasing efficiency.

Per-Unit Costs

The average cost associated with producing one unit of a good or service, calculated by dividing total costs by the number of units produced.

Labor Productivity

A measure of economic performance that calculates the amount of goods and services produced per hour of labor.

Mechanized Transportation

The use of machinery, such as cars, trains, and airplanes, to move goods and people over distances, significantly increasing efficiency and speed compared to traditional methods.