Questions
MCD2020 - T1 - 2025 Homework Quiz 1 - Foundations of Economics and Gains from Trade
Single choice
When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:
Options
A.a. increasing relative costs.
B.b. a comparative advantage.
C.c. gains from trade.
D.d. an absolute advantage.
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Step-by-Step Analysis
To begin, we should connect the question to the core idea of productivity differences between producers.
Option a: increasing relative costs. This would imply that the cost of producing another unit rises as more is produced, which describes increasing opportunity costs or a bowed production possibility frontier, not the situ......Login to view full explanationLog in for full answers
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