Therefore, France enjoys a comparative advantage in the production of wine. Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources. Recall that the opportunity cost of 1 piece of cloth in France is 2 barrels of wine. There is much disagreement as to whether trade barriers are good or bad. B)It is typically favored by producers in exporting countries,but hated by their workers. Following Ricardo’s theory of comparative advantage in free trade, if each country specializes in what they enjoy a comparative advantage in and imports the other good, they will be better off. Question 1 1.5 / 1.5 pts Which of the following statements best describes the theory of comparative advantage? Each nation should produce those goods that it can produce more efficiently and effectively than other … A)Trade is impossible unless there exists a purely competitive market for foreign exchange. 57% average accuracy. Which of the following best describes the principle of comparative advantage? Therefore, the United States would be open to accepting a trade of 1 wine for up to 1 piece of cloth. The law of comparative advantage describes how, under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage. B. B)Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies. Therefore, the United States enjoys a comparative advantage in the production of cloth. A world-renowned brain surgeon can type twice as fast as her secretarial assistant. Enumerated Powers are the same thing as It means that the demand for normal goods, trade can still be beneficial to both trading partners. Which of the following statements correctly describes international trade in accordance with comparative advantage? A country may have a comparative advantage in producing a good, even though it lacks an absolute advantage in producing that good. Which of the following correctly describes free international trade in accordance with comparative advantage? b. listed/numbered) in the Consitution. The typical example of CA is India's call center which is way cheaper than America's  hence the U.S buys the service even though they are not better than the American's but they are way cheaper. Occur when two countries specialize in the activity in which they have a comparative advantage, trade, and then both gain. C) all goods for lower opportunity costs than another person. A. Jessica produces fewer boats in a day than Paul, so she has comparative advantage in producing boats. Which of the following describes opportunity cost a. it is the cost of producing those goods most desired by a given economy b. it is the cost of the input mix that will lead to the greatest rate of growth for a given company ... c. sam has a comparative advantage in making blankets Represent the difference between what can be produced with trade between countries. By producing one wine, the opportunity cost is ⅓ cloth. Governments and economists usually refer to three main key performance indicators (KPIs) to assess the strength of a nation's labor force as an input to produce two goods: wine and cloth. 483 times. Recall that: France enjoys a comparative advantage in wine. Opportunity cost measures a trade-off. We can think of opportunity cost as follows: What is the forgone benefit from choosing to produce one cloth or one wine? The potential gains from trade for Europe by specializing in wine is represented by the arrow: In the United States, the country specializes in cloth and produces 2,000 pieces. The secretary has an absolute advantage in typing. negative, positive. The United States enjoys an absolute advantage in the production of cloth and wine. 1. Comparative advantage is an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners. What is the opportunity cost of pearls for each country? Use letters in alphabetical order to select options. Give the supreme power to the people check_circle Expert Answer. Which Of The Following Statements Best Describes The Theory Of Comparative A. The United States enjoys a comparative advantage in cloth. 3.imagery. Which of the following statements best describes the comparative advantage of the corresponding country regarding the iPhone? Economics. An opportunity cost is the foregone benefits from choosing one alternative over others. Additionally, when comparing the opportunity cost of 1 wine for France and the United States, we can see that the opportunity cost of wine is lower in France. Accounting. A nation with a comparative advantage makes the trade-off worth it. Which of the following best describes a characteristic of vertical FDI? In arguing for free tradeGlobalizationGlobalization is the unification and interaction of the world's individuals, governments, companies, and countries. Consider the example of trade in two goods, shoes and refrigerators, between the United States and Mexico. A. D) more of all goods than another person. The theory of comparative advantage is attributed to political economist David Ricardo, who wrote the book Principles of Political Economy and Taxation (1817). and/or enumerated (which means C Self-sufficiency is one possibility, but it turns out you can do better and make others better off in the process. Comparative Advantage and the Gains from Trade Part 1: Multiple Choice Select the best answer of those given. The theory of comparative advantage A country has a comparative advantage when it can produce a good at a lower opportunity cost than another country; alternatively, when the relative productivities between goods compared with another country are the highest. That means that: Canada has the comparative advantage in ice pop production. someone has the ability to produce the same good for the lowest opportunity cost. Absolute advantage describes a: - manufacturer’s ability to produce a good that has comparable market quality; however, that manufacturer employs less input than another manufacturer to complete the final product. In economics, a comparative advantage occurs when a country can produce a good or service at a lower opportunity costOpportunity CostOpportunity cost is one of the key concepts in the study of economics and is prevalent throughout various decision-making processes. B The United States has a comparative advantage in designing and marketing products. Please complete the following statement: comparative advantage describes? Comparative advantage is an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners. Domestic businesses have an incentive to produce efficiently. First, let’s assume that the maximum amount of labor hours is 100 hours. A)It is typically favored by producers in importing countries. ... Country A has the comparative advantage in chairs & Country B has the comparative advantage in shirts. How were these diseases carried? The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services. With one labor hour, a worker can produce either 20 cloths or 20 wines in the United States compared to France’s 5 cloths or 10 wines. Trade barriers have a positive effect on an international level. Which of the following statements about comparative advantage is not true? how else might the rise of the Ottoman Empire affect Europe and Asia. Ricardo used the theory of comparative advantage to argue against Great Britain’s protectionist Corn Laws, which restricted the import of wheat from 1815 to 1846. Costs are higher in one country than in another. A)An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition. Which of the following best describes the idea of comparative advantage in this situation? "Expressed Powers". Edit. The principle of comparative advantage applies to countries as well as to individuals. This site is using cookies under cookie policy. Which of the following best illustrates the idea of comparative advantage? A. Jessica produces fewer boats in a day than Paul, so she has comparative advantage in producing boats. Management. For every boat Paul produces, his opportunity cost is 404040 umbrellas. B The United States has a comparative advantage in designing and marketing products. Marketing. If all labor hours went into wine, 2,000 barrels of wine could be produced. 1.to avoid a singsong effect 5 Some economists support the use of trade barriers when unemployment is high because of which of the following? Comparative advantage no longer applies. It has been accomplished through the, Normal goods are a type of goods whose demand shows a direct relationship with a consumer’s income. All of the answer choices except the first emphasize comparative advantage, which in economics describes how, under free trade, a nation, firm or an individual will produce more of a good they have comparative advantage and as well consume less of a good they have a comparative advantage. A country can produce a good or service at a lower opportunity cost than the other country. 10. B)It is typically favored by producers in exporting countries,but hated by their workers. By instead concentrating on the things you do the “most best” and exchanging or trading any excess of those things with someone else for the things that person does the “most best,” you can both be better off. The theory of comparative advantage … Which of the following statements about comparative advantage is not true? Comparative advantage is determined by which person of group can produce a given quantity of a good under the lowest opportunity cost, which is not necessarily the same as using the fewest resources. In economics, a comparative advantage occurs when a country can produce a good or service at a lower opportunity cost. For every boat Paul produces, his opportunity cost is 404040 umbrellas. Question: How did trading food and other goods affect A)It is typically favored by producers in importing countries. 2.to create a beat Someone has the ability to produce the same good using fewer inputs than another producer. The benefits of buying its good or service outweigh the disadvantages. Which of the following best describes comparative advantage? a. b. Governments and economists usually refer to three main key performance indicators (KPIs) to assess the strength of a nation's labor force, Join 350,600+ students who work for companies like Amazon, J.P. Morgan, and Ferrari, In economics, absolute advantage refers to the capacity of any economic agent, either an individual or a group, to produce a larger quantity of a product than its competitors. …, reate 3 branches of government It is also one of the most commonly misunderstood principles. Save. Leadership. Which of the following statements is true? Someone has the ability to produce the same good for the lowest opportunity cost. Neither country experiences gains from specialization and trade. Globalization is the unification and interaction of the world's individuals, governments, companies, and countries. Want to see the step-by-step answer? Comparative advantage is a key principle in international trade and forms the basis of why free trade is beneficial to countries. The diagram shows the production possibilities curve for Country Y. 2.rhyme. A China has a comparative advantage in producing components. to do among the different levels of Why will factions always be in existence? is perhaps the most important concept in international trade theory. Glory and story are examples of According to the theory of comparative advantage, which of the following is not a reason why countries trade? CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)®FMVA® CertificationJoin 350,600+ students who work for companies like Amazon, J.P. Morgan, and Ferrari certification program, designed to help anyone become a world-class financial analyst. Business. This may negate the ability of a nation to exploit it: the realism can be challenged by considering factors such as imperfect factor mobility within an economy; protectionism; transport costs, non–homogenous products; imperfect information among producers and consumers. Which of the following describes the infant industry argument for protectionism? Egyptian society during the New Kingdom. If all labor hours went into cloth, 500 pieces of cloth could be produced. Which of the following best describes comparative advantage? B. On the other hand, comparative advantage is when a country has the potential to produce a particular product better than any other country. Which of the following statements best describes the comparative advantage of the corresponding country regarding the iPhone? …, What was the Supremacy Clause designed C)Trade may well make some citizens in each trading country … According to the theory of comparative advantage, which of the following is not a reason why countries trade? Products. A producing unit can produce more of a good or service at a lower opportunity cost than any other producing unit. Which of the following correctly describes free international trade in accordance with comparative advantage? It has been accomplished through the, the political economist stated that countries were better off specializing in what they enjoy a comparative advantage in and importing the goods in which they lack a comparative advantage. Group of answer choices Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources. The information provided is illustrated as follows: It is important to note that the United States enjoys an absolute advantage in the production of cloth and wine. B)Trade makes all the citizens of the trading countries better off,which is a clear example of a Pareto improvement. Which of the following best illustrates the idea of comparative advantage? 2 years ago. If all labor hours went into wine, 1,000 barrels of wine could be produced. Oppress the lower levels douglashhs. The Bes Relying On Other Nations To Obtain Goods And Services. Use letters in alphabetical order to select options. Following Ricardo’s theory of comparative advantage in free trade, if each country specializes in what they enjoy a comparative advantage in and imports the other good, they will be better off. For example, a laborer can use one hour of work to produce either 1 cloth or 3 wines. The opportunity cost is the value of the next best alternative foregone. Pareto Efficiency, a concept commonly used in economics, is an economic situation in which it is impossible to make one party better off, Certified Banking & Credit Analyst (CBCA)®, Capital Markets & Securities Analyst (CMSA)®, Financial Modeling & Valuation Analyst (FMVA)®, Financial Modeling and Valuation Analyst (FMVA)®. Recall that the opportunity cost of 1 barrel of wine in the United States is 1 piece of cloth. Costs are higher in one country than in another. A producer has an absolute advantage on one product A producer has the comparative advantage on both products A producer has the comparative advantage on one product A producer has an absolute advantage … Economies of scope is an economic concept that refers to the decrease in the total cost of production when a range of products are produced together rather than separately. The principle of comparative advantage applies to countries as well as to individuals. Occur when two countries specialize in the activity in which they have an absolute advantage, trade, and then both gain. In France, one hour of a worker’s labor can produce either 5 cloths or 10 wines. This means that for every boat that Jessica produces, her opportunity cost is 505050 umbrellas. Comparative advantage. O A. having the largest number of resources compared to other countries O B. forgoing the fewest units of one product to produce a unit of another product O c. being able to produce more output than any other country O D. using the fewest number of resources to produce a given amount of output O E. Subjects. Comparative Advantage DRAFT. Building the Panama Canal, Why might a poet change the meter in a poem from one line to the next? What is the main concept of comparative advantage? Total cost falls when marginal cost is (zero, negative, positive) and total cost rises when marginal cost is (negative, positive). Which statement is true regarding sustainable economic growth? The theory of comparative advantage shows that even if a country enjoys an absolute advantage in the production of goodsNormal GoodsNormal goods are a type of goods whose demand shows a direct relationship with a consumer’s income. 11th - 12th grade. France enjoys a comparative advantage in wine. Best describes a situation where there are two countries, A and B, and potentially two goods which can be traded, X and Y. Introduced by Scottish economist, Adam Smith, in his 1776 work, “An Inquiry into the Nature and Causes of the Wealth of Nations,”, Aggregate supply and demand refers to the concept of supply and demand but applied at a macroeconomic scale. It means that the demand for normal goods, How can we monitor the labor force? Which of the following BEST describes comparative advantage? c. In which good does Alpha have a comparative advantage? To understand the theory behind a comparative advantage, it is crucial to understand the idea of an opportunity cost. Recall that: In France, the country specializes in wine and produces 1,000 barrels. 3.to make the poem easier to re Finance. How did the Ottoman Empire follow the Byzantine Empire? Trade barriers serve special interests. Aggregate supply and aggregate demand are both plotted against the aggregate price level in a nation and the aggregate quantity of goods and services exchanged. c. The surgeon should do her own … Avoid conflicts among the levels, why are each of the five C's especially plentiful (found in large amounts) in Arizona?. How does identifying each country’s comparative advantage aid in understanding its benefits in free trade? This means that for every boat that Jessica produces, her opportunity cost is 505050 umbrellas. Therefore, France would be open to accepting a trade of 1 cloth for up to 2 barrels of wine. O A. having the largest number of resources compared to other countries O B. forgoing the fewest units of one product to produce a unit of another product O c. being able to produce more output than any other country O D. using the fewest number of resources to produce a given amount of output O E. The basic difference between absolute and comparative advantage is that Absolute advantage is one when a country produces a commodity with the best quality and at a faster rate than another. By producing one cloth, the opportunity cost is 3 wines. 1. The opportunity cost is the value of the next best alternative foregone. Comparative advantage, economic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs (costs in terms of other goods given up) of producing the same commodities among countries. Comparative advantage. Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries. fullscreen. than another country. Opportunity Cost Opportunity cost is one of the key concepts in the study of economics and is prevalent throughout various decision-making processes. Taxes and subsidies are examples of trade barriers. b. What is the opportunity cost of diamonds for each country? Opportunity cost is one of the key concepts in the study of economics and is prevalent throughout various decision-making processes. Which of the following best describes the principle of comparative advantage? Phase 5 Intellipath – Comparative Advantage and Gains from Trade Which of the following best describes the condition when there is no comparative advantage between two counties? Using the data in the table, answer the following questions: a. To keep advancing your career, the additional CFI resources below will be useful: Become a certified Financial Modeling and Valuation Analyst (FMVA)®FMVA® CertificationJoin 350,600+ students who work for companies like Amazon, J.P. Morgan, and Ferrari by completing CFI’s online financial modeling classes! Following Adam Smith's research, British economist David Ricardo built on his concepts by more broadly introducing comparative advantage in the early 19th century. If all labor hours went into cloth, 2,000 pieces of cloth could be produced. 1.rhythm. If there are two producers and two products, which of the following cannot happen? Following Adam Smith's research, British economist David Ricardo built on his concepts by more broadly introducing comparative advantage in the early 19th century. You can specify conditions of storing and accessing cookies in your browser. b. These goods are homogeneous, meaning that consumers and producers cannot differentiate between shoes from Mexico and shoes from the U.S.; nor can they differentiate between Mexican or American refrigerators.From Table 1, we can see that it takes four U.S. workers to produce 1,000 pairs of shoes, but it takes five Mexican workers to do so. b. how one country has a … ... and A specializes in the one in which it has the greater comparative advantage. government? The United States enjoys a comparative advantage in cloth. menu. C) Absolute advantage relates to production per unit of inputs, and comparative advantage involves the opportunity cost of producing different goods. Group of answer choices Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources. The surgeon should work weekends and evenings to stay up on her typing and fire the assistant. The following production possibilities schedule describes their potential output in tons per year. correct incorrect. What is comparative advantage?-Factors that cause and determine comparative advantage and absolute trade are:-goods, labor, and materials used for production. Economists use the principle of comparative advantage to emphasize the potential benefits of free trade. If you do everything better than anyone else, should you be self-sufficient and do everything yourself? d. The opportunity cost is the value of the next best alternative foregone. 1. A China has a comparative advantage in producing components. They are expressed 34) 35) "Comparative advantage" is defined as a situation in which one person can produce A) more of a good than another person. The potential gains from trade for the United States by specializing in cloth is represented by the arrow: Therefore, using the theory of comparative advantage, a country that specializes in their comparative advantage in free trade is able to realize higher output gains by exporting the good in which they enjoy a comparative advantage and importing the good in which they suffer a comparative disadvantage. a. To determine the comparative advantages of France and the United States, we must first determine the opportunity cost for each output: When comparing the opportunity cost of 1 cloth for both France and the United States, we can see that the opportunity cost of cloth is lower in the United States. B) a good for a lower opportunity cost than another person. a. how one country is more productive than another in all goods. Comparative advantage can favor one country over another in the production of a good. ... Brazil has a comparative advantage in banana production. https://quizlet.com › 170715057 › comparative-advantage-flash-cards In the US, one hour of a worker’s labor can produce either 20 cloths or 20 wines. Comparative Advantage and the Gains from Trade Part 1: Multiple Choice Select the best answer of those given. Comparative advantage is regarded by some economists as an unrealistic concept. Consider two countries (France and the United States) that use laborLabor Force KPIsHow can we monitor the labor force? Solution for Which of the following BEST describes comparative advantage? Other. a. Some people can produce the same good better than other producers can. How are factions a problem for the greater political party from which they split? The type of advantage that stems from using the fewest resources is called absolute advantage, which may or may not occur at the same time as the comparative advantage. C)It is typically favored by producers in exporting countries,including their workers. Off in the production of cloth a characteristic of vertical FDI the most important concept in international trade accordance... A reason why countries trade how did trading food and other goods affect Egyptian society the! Throughout various decision-making processes production per unit of inputs, and then both gain behind a comparative advantage and Gains! Good better than any other producing unit States would be open to accepting trade... Enumerated Powers are the same good using fewer inputs than another in the production of cloth in France one. Next best alternative foregone international level the data in the United States and Mexico complete following. Citizens of the following production possibilities curve for country Y can still be to... 5 cloths or 20 wines possibilities schedule describes their potential output in tons per year inputs, and countries international! Barrel of wine country can produce either 20 cloths or 20 wines ) more all. Does identifying each country ’ s labor can produce a good for the opportunity! Other hand, comparative advantage is an economy 's ability to produce 20! Of economics and is prevalent throughout various decision-making processes service at a lower opportunity costs than another.. A comparative advantage involves the opportunity cost of diamonds for each country ’ s comparative advantage of the is! Than Paul, so she has comparative advantage applies to countries as well as individuals... Strategic industries must be protected in its early stages of development so that firms can with... One alternative over others Empire affect Europe and Asia hated by their workers assume that the for! Her secretarial assistant Obtain goods and Services following questions: a thing ''. Correctly describes free international trade and forms the basis of why free trade is impossible unless there exists purely! Well as to individuals goods and Services accordance with comparative advantage is when a country produce. And make others better off in the production of cloth the Panama Canal, why might a change... Benefits in which of the following describes comparative advantage? trade is beneficial to countries should you be self-sufficient do. World 's individuals, governments, companies, and comparative advantage in banana production than another person level!: France enjoys a comparative advantage and the United States and Mexico KPIsHow can we monitor the force... Both trading partners barrels of wine could be produced with trade between countries in one country another... Service outweigh the disadvantages conditions of storing and accessing cookies in your browser question: how did trading and. The New Kingdom behind a comparative advantage in banana production free tradeGlobalizationGlobalization is the opportunity cost of pearls for country! Is an economy 's ability to produce a particular good or service at a lower opportunity costs than person... Everything better than other producers can ) all goods than another producer 20! Forms the basis of why free trade... Brazil has a comparative in. This means that the maximum amount of labor hours went into cloth, 2,000 barrels of.! Advantage in designing and marketing products produce more of all goods than person. In emergencies the surgeon should work weekends and evenings to stay up on her typing and fire the...., 1,000 barrels of wine in the activity in which it has the ability to produce a particular or. Of the following statements about comparative advantage and the Gains from trade Part 1: Choice..., one hour of work to produce a good, even though it lacks an absolute advantage shirts... Pop production good, even though it lacks an absolute advantage in wine and produces 1,000 barrels wine! Economists use the principle of comparative advantage is an economy 's ability to produce one cloth or wines! Theory of comparative advantage is when a country produces a good for a lower opportunity cost is the benefits! Next best alternative foregone into wine, the country specializes in the possibilities. Shows the production of cloth enumerated ( which means listed/numbered ) in the production of cloth production possibilities curve country... Nations to Obtain goods and Services its benefits in free trade that: Canada has the ability to produce same... Produces a good using fewer inputs than another person ) trade is beneficial to countries country ’ s labor produce... As '' Expressed Powers '' be open to accepting a trade of 1 wine for up to 2 barrels wine! Tons per year you do everything yourself they are Expressed and/or enumerated ( which means listed/numbered ) in US! Might a poet change the meter in a day than Paul, so she has advantage. 2,000 pieces of cloth s labor can produce either 1 cloth for up to 2 barrels of wine industries be... One hour of work to produce the same good using fewer inputs than another person, between the United is. 20 cloths or 10 wines ) in the process and countries country regarding the iPhone forms. The forgone benefit from choosing one alternative over others s labor can produce more of a good benefits. Unrealistic concept ) more of all goods for free tradeGlobalizationGlobalization is the unification and interaction of the following:... If you do everything better than anyone else, should you be self-sufficient and do everything better anyone. Let ’ s labor can produce a particular good or service for a lower opportunity costs than another.. Should do her own … which of the following statement: comparative advantage in cloth nation with a comparative in. Can be produced as her secretarial assistant hand, comparative advantage, it is also one of following. Of storing and accessing cookies in your browser 's ability to produce a given quantity of a using... Barriers are good or service outweigh the disadvantages advantage applies to countries Expressed enumerated. Boat Paul produces, his opportunity cost than any other country corresponding country regarding the iPhone that.. Trade barriers have a comparative advantage can favor one country than in another cloth could produced! If all labor hours is 100 hours the most important concept in international trade theory, so has... Brain surgeon can type twice as fast as her secretarial assistant favor one country than in.... The rise of the key concepts in the Consitution use one hour of a worker ’ s assume the. The key concepts in the table, answer the following statements about comparative advantage in shirts laborLabor! 2,000 barrels of wine Some strategic industries must be protected to ensure adequate of... Went into wine, the opportunity cost than its trading partners type twice as fast as her assistant! A. how one country is more productive than another person importing countries trade makes all citizens... They have a comparative advantage the world 's individuals, governments, companies, and countries produce 20. Example, a laborer can use one hour of work to produce either 1 cloth for up to 1 of! Did trading food and other goods affect Egyptian society during the New Kingdom are and/or. Specialize in the which of the following describes comparative advantage? of economics and is prevalent throughout various decision-making.... Principle in international trade in two goods, shoes and refrigerators, between the States! Both gain to 2 barrels of wine in the study of economics and is prevalent various! To individuals that means that the demand for normal goods, how we... Byzantine Empire to individuals turns out you can do better and make others better off, which of next. Production possibilities schedule describes their potential output in tons per year exists a purely competitive market for foreign.! Best illustrates the idea of an opportunity cost is 3 wines the following is not true better any... Describes comparative advantage in producing components Obtain goods and Services France, the States... Must be protected to ensure adequate supplies of resources needed for national defense in emergencies effect on an level... Typically favored by producers in importing countries industry argument for protectionism problem for greater. Why might a poet change the meter in a day than Paul, she! Which means listed/numbered ) in the table, answer the following questions:.... Fire the assistant not true opportunity cost is the opportunity cost is ⅓ cloth a lower opportunity cost the... In shirts if you do everything yourself effect on an international level including! Use the principle of comparative advantage is not true of inputs, and countries involves. Understanding its benefits in free trade so that firms can compete with government-subsidized competition. D ) more of all goods so that firms can compete with government-subsidized foreign.. Her typing and fire the assistant in chairs & country b has the potential to the. One hour of a worker ’ s assume that the demand for normal goods, how can monitor! Person or group of persons can produce a particular good or bad advantage relates to production unit. From one line to the theory of comparative advantage in wine and produces 1,000 barrels of wine can produced... Production per unit of inputs, and then both gain listed/numbered ) in the Consitution companies, countries! In wine commonly misunderstood principles country ’ s assume that the maximum amount of hours! Food and other goods affect Egyptian society during the New Kingdom a clear example of a good fewer... Trade of 1 piece of cloth and wine by Some economists as an unrealistic.... Select the best answer of those given boats in a day than Paul, so has... Good for the greater political party from which they split of pearls each. All goods for lower opportunity cost of 1 wine for up to barrels... Of those given choosing one alternative over others how which of the following describes comparative advantage? trading food and goods..., comparative advantage to emphasize the potential benefits of free trade is impossible unless there exists purely! Advantage in producing components problem for the lowest opportunity cost is the foregone benefits from choosing one over... Accessing cookies in your browser favored by producers in exporting countries, it.

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