Asked by Redwanul Haque on Apr 29, 2024
Verified
The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that
A) the production possibilities curves of any two nations are identical.
B) a nation's production possibilities and trading possibilities lines coincide.
C) a nation's trading possibilities line lies to the right of its production possibilities line.
D) a nation's production possibilities line lies to the right of its trading possibilities line.
Comparative Advantage
The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than competitors.
International Specialization
The economic strategy where countries focus on the production and export of goods and services for which they have a comparative advantage.
Trading Possibilities Line
A line that shows the different combinations of two products that an economy is able to obtain (consume) when it specializes in the production of one product and trades (exports) it to obtain the other product.
- Evaluate the influence of specialization and trade on countries' economic outcomes and production potential.
- Comprehend the role of trading possibility frontiers and their effects on comparative superiority.
Verified Answer
Learning Objectives
- Evaluate the influence of specialization and trade on countries' economic outcomes and production potential.
- Comprehend the role of trading possibility frontiers and their effects on comparative superiority.
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