Asked by
yordanka licea
on Dec 11, 2024
Verified
Refer to Table 2-1. According to the law of comparative advantage, both Austria and Italy could gain if
A) Austria produced all of the food and clothing and Italy did not produce anything.
B) Austria specialized in producing clothing, Italy specialized in producing food, and they traded.
C) Austria specialized in producing food, Italy specialized in producing clothing, and they traded.
D) Italy and Austria were both were self-sufficient and did not trade.
Comparative Advantage
The ability of an entity to produce a good or service at a lower opportunity cost than others, enabling more efficient trade.
Austria
A landlocked country in Central Europe, known for its rich cultural history, and contributions to art, music, and science.
Italy
A country located in southern Europe, known for its rich history, cultural heritage, and significant contributions to art, food, and fashion.
- Comprehend the concept of the law of comparative advantage.
- Comprehend the gains associated with commercial exchange and specialization.
Verified Answer
LR
Learning Objectives
- Comprehend the concept of the law of comparative advantage.
- Comprehend the gains associated with commercial exchange and specialization.