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Economics
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2 Nov 2020

4. A country has a/an _____________________________ when a good can be produced at a lower cost in terms of other goods.

a. absolute advantage

b. comparative advantage

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Microeconomics
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Explaining the Theories of International Trade
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Raushan Raj
Raushan RajLv8
2 Nov 2020

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Related questions

If a country has a comparative advantage in the production of a good:
 
a. it can produce that good at a lower opportunity cost.
 
b. it will not find trade beneficial because other countries won't have a comparative advantage in other goods.
 
c. it must also have an absolute advantage in the good.
If a country has a comparative advantage in the production of a good:
 
(i) it will not find trade beneficial because another country(ies) won't have a comparative advantage in other goods.
(ii) it must also have an absolute advantage in the good.
(iii) it can produce that good at a lower opportunity cost.

If there are two goods and two countries, then one country can have

a. an absolute advantage in both goods but a comparative advantage in only one good.

b. an absolute advantage in both goods and a comparative advantage in both goods.

c. an absolute advantage in neither good and a comparative advantage in both goods.

d. an absolute advantage in one good, an absolute disadvantage in the other good, and a comparative advantage in neither.

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