The Theory That States That Each Country Should Specialize in Producing

question 12

Multiple Choice

The theory that states that each country should specialize in producing specific products that will improve its trade with other states is known as __________ advantage.

• A) complete
• B) mercantilist
• C) comparative
• D) competitive

---

Definitions:

Production Function

A production function is a mathematical model that describes the relationship between inputs used in production (like labor and capital) and the output produced.

Profit

The financial gain achieved when the revenues obtained from business activities exceed the expenses, costs, and taxes associated with maintaining the activity.

Commodity

A primary item used in trading that is replaceable with other items of the same type.

Maximise

To increase to the greatest possible amount or degree.