Suppose the Nation of Canada Forbids International Trade

question 29

Multiple Choice

Suppose the nation of Canada forbids international trade.In Canada,you can obtain a hockey stick by trading 5 baseball bats.In other countries,you can obtain a hockey stick by trading 8 baseball bats.These facts indicate that

• A)if Canada were to allow trade,it would export hockey sticks.
• B)Canada has an absolute advantage,relative to other countries,in producing hockey sticks.
• C)Canada has a comparative advantage,relative to other countries,in producing baseball bats.
• D)All of the above are correct.

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Definitions:

Accounting Relationships

The connections and correlations between different financial statements and accounts within a business's accounting system.

Capital Intensity Ratio

A measure of the amount of capital needed per dollar of revenue, indicating the level of investment required to sustain operations.

Fixed-Asset Utilization

Fixed-asset utilization is a measure of how efficiently a company is using its fixed assets, like plant, property, and equipment, to generate sales or revenue.

Internal Growth Rate

The maximum growth rate a company can achieve without needing to secure additional financing.