Multiple Choice Question
Which term is used to refer to a country focusing on producing a relatively small number of goods or services based on what the country can produce most efficiently?
A. Comparative advantage
B. Absolute advantage
C. Specialization
D. Trade deficit
The term used to refer to a country focusing on producing a relatively small number of goods or services based on what the country can produce most efficiently is:
a) Comparative advantage
b) Import substitution
c) Protectionism
d) Absolute advantage
The correct answer is: a) Comparative advantage
The term used to refer to a country focusing on producing a relatively small number of goods or services based on what the country can produce most efficiently is known as "comparative advantage."
To arrive at this answer, you should have a basic understanding of economics. Specifically, the concept of comparative advantage states that countries should specialize in producing goods or services in which they have lower opportunity costs compared to other countries. In other words, a country should produce and export the goods or services that it can produce at a lower cost or in greater quantity compared to other countries.
To identify the term associated with this concept in the multiple-choice question, you can use process of elimination. Read through the options provided and see which one aligns with the given explanation. In this case, the term "comparative advantage" fits the given definition and is the correct answer.