Asked by Baylee Grace on May 16, 2024
Verified
Which of the following statements about comparative advantage is not true?
A) Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.
B) The principle of comparative advantage applies to countries as well as to individuals.
C) Economists use the principle of comparative advantage to emphasize the potential benefits of free trade.
D) A country may have a comparative advantage in producing a good, even though it lacks an absolute advantage in producing that good.
Comparative Advantage
The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, facilitating beneficial trade and specialization.
Absolute Advantage
The ability of a party to produce more of a good or service than competitors, using the same amount of resources.
Free Trade
The absence of tariffs, quotas, or other governmental restrictions on international trade, allowing goods and services to move freely across borders.
- Discern the distinctions between comparative and absolute advantages.
Verified Answer
Learning Objectives
- Discern the distinctions between comparative and absolute advantages.
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