Comparative Advantage

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently
• The opportunity cost of producing more machines is constant
• Country Y cannot produce at point E
• The most efficient point of production is point D

Labor, human capital, entrepreneurship, natural resources, and capital are all examples of which of the following?

• Outputs

• Substitutes in Production

• Absolute Advantage

• Productive resources

The U.S. can produce 30 toys and 15 beds. Canada can produce 10 toys and 12 beds. Who has the absolute advantage in toys?

• Peru

• U.S.

• neither

• not enough info

A benefit, profit, or value of something that must be given up to acquire or achieve something else.

• Opportunity Cost
• Comparative Advantage
• Specialization
• Production

The benefit or advantage of an economy to be able to produce a commodity at a lesser opportunity cost than other entities is referred to as

• Opportunity Cost
• Absolute Advantage
• Comparative Advantage
• Growth

The nation's ability to produce more general goods than another entity is referred to as

• Specialization

• Comparative Advantage

• Opportunity Cost

• Absolute Advantage

To figure out a nation's comparative advantage, you compare their _________ to other entities

• Absolute Advantage

• Opportunity Cost

• Resource

• Revenue

Suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. Which of the following is true?

• Sam has an absolute advantage in making blankets
• Sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets
• Sam has a comparative advantage in making blankets
• Sam has a comparative advantage in knitting sweaters

If nations specialize according to their comparative advantage and engage in trade with each other, each nation can:

• Consume outside its production possibilities curve 
• Produce outside its production possibilities curve 
• Shift its production possibilities curve to the right 
• Produce more of all goods 

A focus on developing only certain skills or producing only certain goods/services

• Imports
• Exports
• Specialization
• Globalization