Assume That Bulgaria Has a Comparative Advantage in Producing Sandals

question 350

Multiple Choice

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria. We can conclude that

• A) Bulgaria also has an absolute advantage in producing sandals relative to Finland.
• B) Bulgaria has a lower opportunity cost of producing sandals relative to Finland.
• C) Finland has an absolute disadvantage in producing sandals relative to Bulgaria.
• D) Labor costs are higher for sandal producers in Finland than in Bulgaria.

---

Definitions:

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, reflecting a company's investment strategy.

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity, including issuing debt, equity transactions, and paying dividends.

Direct Approach

A method of preparing the statement of cash flows where major categories of gross cash receipts and payments are reported.

Indirect Approach

A method of communication or problem-solving that is not straightforward, often involving suggestion or implication rather than direct statements.