If Two Countries Find That Neither Has a Comparative Advantage

question 100

Multiple Choice

If two countries find that neither has a comparative advantage in the production of any good or service:

• A) it must be true that one country produces everything more efficiently than the other country.
• B) each country will find it beneficial to trade.
• C) it is impossible for them to benefit from trade.
• D) they should still specialize and trade.

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Definitions:

Prior Quarter Sales

The total revenue generated by a business in the quarter immediately preceding the current one.

Accounts Payable

The amount of short-term debts or obligations a company owes to its suppliers or creditors.

Account Receivable

Debts owed by customers to a company for products or services that have been dispatched but not settled.

Inventory Sale

The process of selling goods from a company's inventory to generate revenue, often tracked to understand sales trends and inventory turnover.