When one country can produce a given amount of a good using fewer inputs than any other country,
A)It has an absolute advantage in producing the good.
B)It has a comparative advantage in producing the good.
C)Specialization will definitely increase worldwide consumption possibilities.
D)Specialization will definitely increase worldwide production possibilities.

Question

Quizplus · Accepted Answer

When one country can produce a given amount of a good using fewer inputs than any other country, it has an absolute advantage in producing the good. This means that the country is inherently more efficient in producing the good than any other country, regardless of any other factors such as costs or prices.

Answer: B
 When one country can produce a given amount of a good using fewer inputs than any other country, it also has a comparative advantage in producing the good. Comparative advantage is determined by comparing the opportunity cost of producing a good between two countries. In this case, the country with the absolute advantage in producing the good will have a lower opportunity cost than any other country, thus having a comparative advantage.

Answer: C
 Specialization can lead to an increase in worldwide consumption possibilities, but it is not a guarantee. Specialization allows countries to focus on producing goods that they are relatively more efficient in, freeing up resources that can be used to produce other goods or services. This can potentially increase the availability and variety of goods for consumers. However, whether or not consumption possibilities actually increase will depend on many factors such as trade agreements, production costs, and consumer preferences.

Answer: D
 Specialization can increase worldwide production possibilities by allowing countries to produce goods at a lower opportunity cost. This can lead to an overall increase in the global output of goods and services. However, this is not a guarantee as it depends on many factors such as availability of resources, technology, and trade agreements.

When One Country Can Produce a Given Amount of a Good