If tastes are identical between countries, then comparative advantage is determined by ?
Correct answer: A. supply condition only
- A. supply condition only
- B. demand conditions only
- C. supply and demand conditions
- D. can't tell without more information
Explanation
With identical tastes, demand patterns are the same, so comparative advantage comes from relative production conditions, including technology and factor supplies. These are supply-side conditions, making option a the best answer.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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