Question

Fill in the blanks to complete the passage about gains from trade. To have an absolute advantage means to be able to produce more using the same resources. To have________ advantage means to have a lower_______.Comparative advantage is the basis for______. It is________for one producer to have a comparative advantage for every good.

Answer 1

Answer:

- absolute

- cost of raw materials

- exportation of goods

- impossible

Explanation:

To have an absolute advantage means to be able to produce more using the same resources. To have_absolute_______ advantage means to have a lower___production/resource cost____.Comparative advantage is the basis for_exportation of goods_____. It is__impossible______for one producer to have a comparative advantage for every good.

If a producer is producing more using the same resources, that means he has the benefit of obtaining the raw materials at a lower cost.

Comparative advantage is the basis for exportation of goods because producers or countries focus on exporting products that give them comparative advantage, so as to make foreign earnings.

It is impossible for one producer to have comparative advantage for every good.