8)
Absolute advantage is
A) the ability to produce a good or service at a higher opportunity cost than one's
competitors.
B) the ability to produce more of a good or service than competitors when using the same
amount of resources.
C) the ability to produce higher quality goods compared to one's competitors.
D) the ability to produce more of a good or service than competitors that have more
resources.
9) In the real world we don't observe countries completely specializing in the production of
goods for which they have a comparative advantage. One reasons for this is
A) production of most goods involves increasing opportunity costs.
B) tastes for many traded goods are similar in many countries because of globalization.
C) comparative advantage works better in theory than in practice.
D) some countries have more resources than other countries.
10) By definition, economics is the study of
A) the choices people make to attain their goals, given their scarce resources.
B) how to make money in the stock market.
C) supply and demand.
D) how to make money in a market economy.
8)
9)
10)
