Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A can produce 10 units of wine or 5 units of cheese, while Country B can produce 6 units of wine or 3 units of cheese.
B
Country A can produce 4 units of both wine and cheese with equal efficiency.
C
Country A has a higher overall production level than Country B in all goods.
D
Country B can produce more wine than cheese without any trade.
Understanding the Answer
Let's break down why this is correct
Answer
Comparative advantage is the idea that a person or country should focus on producing goods or services they can make more efficiently than others, while trading for what they are less efficient at producing. For example, imagine two friends, Alice and Bob. Alice is great at baking cookies but not very good at mowing lawns, while Bob is excellent at mowing lawns but struggles with baking. If Alice spends her time baking cookies and Bob mows lawns, they can trade cookies for lawn services, making both of them better off than if they each tried to do both tasks. This way, they use their strengths to create more value together.
Detailed Explanation
Country A and Country B can produce different amounts of wine and cheese. Other options are incorrect because This option suggests both goods are made equally well; Having a higher production level in all goods doesn't show comparative advantage.
Key Concepts
comparative advantage
Topic
Understanding Comparative Advantage
Difficulty
easy level question
Cognitive Level
understand
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