Consider a world with two countries and two goods. Under which of the following conditions does comparative advantage NOT exist?
A) One country can produce both goods more cheaply than the other country.
B) One country has more productive resources or inputs than another country.
C) The opportunity cost of producing each good is the same in each country.
D) One country has an absolute advantage in producing one good while the other country has an absolute advantage in producing the other good.
C
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The government of Richland has set a minimum wage for factory workers. This will lead to an ________ if above the current market wage
A) increase in total surplus B) increase in the number of workers supplied C) excess demand for workers D) increase in income inequality
If the price of roses decreases, the supply of roses will also decrease. This statement is an example of a(n) ______.
a. fallacy b. hypothesis c. aggregate d. ceteris paribus