The Principle of Comparative Advantage Does Not Provide Answers to Certain

question 67

Multiple Choice

The principle of comparative advantage does not provide answers to certain questions. One of those questions is

• A)Do specialization and trade benefit more than one party to a trade?
• B)Is it absolute advantage or comparative advantage that really matters?
• C)How are the gains from trade shared among the parties to a trade?
• D)Is it possible for specialization and trade to increase total output of traded goods?

Recognize the role of factors of production in determining supply of goods and services.

Understand the impact of economic growth on job opportunities, wages, and standard of living.

Differentiate between the economic systems (socialism, communism, market economies) and their characteristics.

Understand the business cycle phases, including recession and recovery, and their impact on employment and consumer behavior.

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Definitions:

Assets

A firm’s economic resources, or items of value that it owns, such as cash, inventory, land, equipment, buildings, and other tangible and intangible things.

Receivables Turnover

Sales divided by accounts receivable.