Application of the Principle of Comparative Advantage Leads to

question 116

Multiple Choice

Application of the Principle of Comparative Advantage leads to

• A) greater and greater specialization of labour and other factors of production.
• B) reduced specialization of labour.
• C) societies where everyone can do a little of everything.
• D) lower total output.
• E) misallocation of resources.

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Definitions:

Depreciation

The systematic allocation of the diminution in the value of a tangible asset over its useful life.

General Journal

A comprehensive record of all financial transactions of a company, used to make entries not suited for specific ledgers.

Posting

In accounting, posting refers to the process of transferring entries from the journal into their respective accounts in the ledger, for the purpose of organizing and summarizing financial information.

Journal

A detailed record where all financial transactions of a business are initially recorded before transfer to accounts in the general ledger.