Answered: 1.When people focus on their…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 2P

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1.When people focus on their comparative advantage and then trade for other things, they:

a.improve their standard of living or increase their leisure time.

b.increase the time they spend working and reduce the variety in their consumption.

c. have a lower standard of living than if they focused on their absolute advantage.

d. focus their consumption on just a few things

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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