ECONOMICS
DIVISION OF LABOR AND SPECIALIZATION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Country X has solved the problem of scarcity.
|
|
|
Country X should discontinue making that product.
|
|
|
Country Y should try to produce the same product.
|
|
|
Country X should sell that product to Country Y.
|
Detailed explanation-1: -A comparative advantage exists when a country can produce goods at a lower opportunity cost compared to other countries.
Detailed explanation-2: -We’ll say that country A has an absolute advantage in the production of a good over country B if it can produce more of that good than country B using the same resources. Country A has a comparative advantage in producing the good if it can produce the good at a lower opportunity cost than country B.
Detailed explanation-3: -Answer and Explanation: The ability to produce a good or service using fewer resources than other producers use is known as absolute advantage. An easy example is to think of China, the country that produces more rice than any other.
Detailed explanation-4: -For example Ireland has a comparative advantage in cheese and butter due to climate and a large amount of land suitable for dairy cows. China has a comparative advantage in electronics because it has an abundance of labor.