Rose Has a Comparative Advantage in Computer Programming Whereas Sam

question 72

Multiple Choice

Rose has a comparative advantage in computer programming whereas Sam has a comparative advantage in sales. Therefore,

• A)Sam has a lower opportunity cost of spending his time selling than Rose does.
• B)Rose should specialize in sales.
• C)Sam should write computer programs.
• D)Rose has a higher opportunity cost of spending her time writing computer programs than Sam does.
• E)Sam has a higher opportunity cost of spending his time selling than Rose does.

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Definitions:

Profit Requirement

The minimum level of earnings necessary for a business to sustain its operations or fulfill its financial goals.

Profit Mark-Up

The percentage added to the cost of goods to arrive at the selling price.

Target Selling Prices

The intended price at which a company aims to sell its products, often determined by market conditions and cost considerations.

Target Cost

The desired cost of a product derived from its expected selling price and desired profit.