According to the Theory of Comparative Advantage, a Country Should

question 124

Multiple Choice

According to the theory of comparative advantage, a country should

• A) specialize in and export goods with the highest opportunity cost.
• B) specialize in and export goods with the lowest production cost.
• C) specialize in and export goods with the lowest opportunity cost.
• D) specialize in and export goods with the lowest average cost.

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Definitions:

Marginal Product

The additional output that results from using one more unit of a production factor, keeping all other factors constant.

Total Output

The complete quantity of goods and services produced by an economy in a given period.

Life Expectancy

The average number of years an individual or group is expected to live, often used as a statistical measure of health and well-being in a population.

Input Markets

Markets where firms buy resources, services, and goods they need to produce their own products or provide services.