When a Country or a Region of a Country Specializes

question 58

Multiple Choice

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

• A) absolute advantage.
• B) cost disadvantage.
• C) regional advantage.
• D) comparative advantage.

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Definitions:

Consolidation Worksheet

A tool used in preparing consolidated financial statements, allowing a company to adjust and eliminate the transactions among its controlled entities.

Plant

In terms of fixed assets, it refers to the buildings, machinery, equipment, and property used in the operations of a business.

Inventories

Items held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process.

Useful Life

The period over which an asset is expected to be usable by an entity, affecting its depreciation or amortization.