Inventory Prices for Sales to Foreign Customers -

question 12

Multiple Choice

Inventory prices for sales to foreign customers -

• A)may be based on the exchange rate
• B)may be selected from the ledger record
• C)may be changed or entered in the sales journal
• D)all of the above

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Definitions:

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, leading to specialized production and trade.

Absolute Advantage

A situation in which a country, individual, or company can produce a good at a lower cost per unit than competitors.

Opportunity Cost

The price paid for not choosing the second-best option during decision-making.

Higher Opportunity Cost

The increased potential loss of choosing one option over another, indicating a sacrifice of higher value alternatives.