Asked by Tamerea Downey on May 30, 2024
Verified
In a two-nation, two-good world, if both nations have identical production possibilities curves with constant costs, then one nation would have
A) no comparative advantage over the other nation.
B) a comparative advantage in one good and a comparative disadvantage in the other good.
C) no absolute advantage over the other nation.
D) an absolute advantage in one good and an absolute disadvantage in the other good.
Comparative Advantage
The capacity of a person, business, or nation to create a product or offer a service at a reduced opportunity cost compared to their rivals, thereby gaining specialized production and advantages in trade.
Production Possibilities
The different quantities of goods that an economy can produce with a certain set of resources and technology.
- Examine how differences in production costs between nations facilitate international trade.
Verified Answer
Learning Objectives
- Examine how differences in production costs between nations facilitate international trade.
Related questions
The Principle of Comparative Advantage Indicates That Mutually Beneficial International ...
In a Two-Nation, Two-Good World, Which of the Following Statements ...
Domestic Consumers Gain and Domestic Producers Lose When the Government ...
Differences in Production Efficiencies Among Nations in Producing a Particular ...
Which of the Following Statements Is False ...