The ability of a country to produce a good or service at a lower cost than its trading partners is
A. its absolute advantage.
B. its comparative advantage.
C. both its absolute and comparative advantage.
D. neither its absolute nor its comparative advantage.
A. its absolute advantage.
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At the beginning of the year, Tom's Tubes had a capital stock of 5 tube inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's capital stock at the end of year equals
A) 1 machine. B) 2 machines. C) 3 machines. D) 6 machines.
The higher a security's price in the secondary market the ________ funds a firm can raise by selling securities in the ________ market
A) more; primary B) more; secondary C) less; primary D) less; secondary
Consumer purchases which are consumed at the time and place of purchase are categorized by the Bureau of Economic Analysis as
A) durable goods. B) nondurable goods. C) services. D) investments.
A corporation has been steadily losing money on one of its product lines, plastic flamingo lawn ornaments. The firm produces plastic flamingos in a factory that cost $20 million to build 10 years ago. The firm is now considering an offer to buy that factory for $15 million. Which of the following statements about the decision to sell or not to sell is correct?
a. The firm should turn down the purchase offer because the factory cost more than $15 million to build. b. The $20 million spent on the factory is a sunk cost; that cost should not affect the decision. c. The $20 million spent on the factory is an implicit cost, which should be included in the decision. d. The firm should sell the factory only if it can reduce its costs elsewhere by $5 million.