
Comparative Advantage Quiz

Quiz
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Other
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University
•
Hard
tim skyrme
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Who is often attributed with the law of comparative advantage?
Michael Jordan
David Ricardo
James Mill
Adam Hayes
Answer explanation
The law of comparative advantage is often attributed to David Ricardo, who developed the concept in his book 'Principles of Political Economy and Taxation'.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the key to understanding comparative advantage?
Absolute advantage
Monetary policy
Competitive advantage
Opportunity cost
Answer explanation
The key to understanding comparative advantage is opportunity cost. It refers to the cost of choosing one option over another and is essential in determining which option is more advantageous.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does comparative advantage refer to in the context of international trade?
Ability to impose tariffs on imported goods
Ability to produce more goods than other countries
Ability to produce goods at a lower opportunity cost
Ability to provide stronger value to consumers
Answer explanation
Comparative advantage refers to the ability to produce goods at a lower opportunity cost, giving a country a competitive edge in international trade.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the difference between comparative advantage and absolute advantage?
Comparative advantage refers to providing stronger value to consumers, while absolute advantage refers to being the low-cost provider
Comparative advantage refers to focusing on a particular segment of the consumer pool, while absolute advantage refers to offering superior goods or services
Comparative advantage refers to producing more goods, while absolute advantage refers to producing goods at a lower cost
Comparative advantage refers to producing goods at a lower opportunity cost, while absolute advantage refers to producing more or better goods
Answer explanation
Comparative advantage refers to producing goods at a lower opportunity cost, while absolute advantage refers to producing more or better goods
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What did David Ricardo show about England and Portugal in relation to comparative advantage?
Both countries stopped trading with each other
Both countries focused on producing the same goods
Both countries benefited by specializing and trading according to their comparative advantages
Both countries imposed tariffs on each other's goods
Answer explanation
David Ricardo showed that both England and Portugal benefited by specializing and trading according to their comparative advantages.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the contemporary example of comparative advantage between China and the United States?
China has an absolute advantage in specialized, capital-intensive labor
The United States has a comparative advantage in cheap labor
The United States has a comparative advantage in producing simple consumer goods at a lower opportunity cost
China has a comparative advantage in sophisticated goods or investment opportunities
Answer explanation
The United States has a comparative advantage in producing simple consumer goods at a lower opportunity cost.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main reason for the failure of protectionism according to the theory of comparative advantage?
Rent seeking
Lack of comparative advantage
Lack of government intervention
Global price shocks
Answer explanation
The main reason for the failure of protectionism, according to the theory of comparative advantage, is rent seeking. Rent seeking refers to individuals or groups seeking to gain economic benefits through government intervention, which can lead to inefficiencies and hinder overall economic growth.
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