Which of the Following Statements Is True Concerning Comparative Advantage

question 18

Multiple Choice

Which of the following statements is true concerning comparative advantage?

• A)Poor nations typically have a comparative advantage in high-tech but not agricultural goods.
• B)Poor nations typically have a comparative advantage in agricultural but not high-tech goods.
• C)Poor nations typically have a comparative advantage in the production of all goods.
• D)Rich nations typically have a comparative advantage in the production of all goods.

---

Definitions:

Fixed Manufacturing Overhead

The total of all costs that remain constant regardless of the level of production, including expenses such as rent, utilities, and salaries of permanent staff in a manufacturing setting.

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed overhead costs.

Segmented Income Statement

A financial statement that breaks down income, expenses, and profit margins by specific segments, such as products, services, or geographical regions, within a company.

Contribution Format

A style of income statement presentation that separates fixed costs from variable costs, highlighting the contribution margin.