The Ricardian Model of Comparative Advantage Includes All of the Following

question 10

Multiple Choice

The Ricardian model of comparative advantage includes all of the following assumptions EXCEPT

• A) it is only based on two nations and two products.
• B) product quality varies among nations.
• C) labor is the only factor of production.
• D) labor can move freely within a nation.

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Definitions:

Ending Inventory

The value of goods that remain unsold at the end of an accounting period.

Cost Flow Assumption

An accounting method used to value inventory and determine the cost of goods sold, such as FIFO (First In, First Out) or LIFO (Last In, First Out).

LIFO

"Last In, First Out" method of inventory valuation where the most recently produced items are recorded as sold first.

FIFO

First In, First Out, an inventory valuation method where goods purchased or produced first are sold or consumed first.