Which of the following is true? a. From the perspective of partial equilibrium f

Question

Which of the following is true?

a. From the perspective of partial equilibrium for importing countries of a good, domestic producers are better off, domestic consumers are worse off, and the nation is better off because efficiency gain exceeds the efficiency loss

b. From the perspective of general equilibrium, firms and workers in the importing industry benefit from trade instead of firms and workers in export industries

c. Comparative advantage of a nation is the ability to produce a good at a lower opportunity cost than another nation but comparative advantage can also be most absolute advantage or least absolute disadvantage

d. All of the above

e. A and B

Please provide an explanation for your answer

Explanation / Answer

c. Comparative advantage of a nation is the ability to produce a good at a lower opportunity cost than another nation but comparative advantage can also be most absolute advantage or least absolute disadvantage Basically, comparative advantage is comparing two nations. However, a country with an absolute advantage has the ability to produce a good at a lower opportunity cost than any other nation in the world. For example, if China makes oranges more efficiently than India, they have a comparative advantage, but if America also makes oranges better than every nation (including China) they have an absolute advantage. Least absolute disadvantage is just another way of saying absolute advantage.

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