Which of the following is a difference between absolute advantage and comparative advantage?
a. Absolute advantage occurs when a country has a lower production cost than its trading partner, while comparative advantage occurs when a country produces a good at a lower opportunity cost than its trading partners.
b. Absolute advantage occurs when a country has a higher production cost than its trading partner, while comparative advantage occurs when a country produces a good at a higher opportunity cost than its trading partners.
c. In the case of absolute advantage, a country experiences an increase in total surplus post trade, while in the case of comparative advantage, a country experiences no change in total surplus post trade.
d. Absolute advantage occurs when a country benefits by exporting a particular good, while comparative advantage occurs when a country benefits by importing a particular good.
a
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Suppose two countries use different combinations of inputs, such as labor and capital, to produce the same product. This implies all of the following except that
A) one country is more efficient in the production of the good than the other. B) the inputs are not equally productive in the two countries. C) the prices of the inputs are not the same in the countries. D) the two countries use different technologies to produce the product.
The period of declining growth in real GDP between the peak of the business cycle and the trough is called a(n):
a. recessionary phase. b. expansionary. c. recovery phase. d. stationary phase.