The Law of Comparative Advantage States That

question 17

Multiple Choice

The law of comparative advantage states that:

• A)each country should specialize in producing the good with the lowest opportunity cost.
• B)a country able to produce something using fewer resources than other countries would gain from specialization and trade.
• C)international trade barriers slow the introduction of new goods and better technologies.
• D)countries can gain from trade if production is subject to economies of scale.
• E)countries must agree on how much of one good exchanges for another.

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Definitions:

B₂C Buying

The purchasing process in which businesses sell products or services directly to consumers, typically through retail or online channels.

B₂B Purchasing Process

The sequence of steps a business goes through to purchase goods or services from another business, often involving complex decision-making and multiple stakeholders.

Consumer Decision-Making Process

The stages a consumer goes through before purchasing a product, including problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.

Derived Demand

A situation where the demand for one product or service occurs as a result of the demand for another product or service.