An Individual or Country That Has a Comparative Advantage in the Production

question 49

Multiple Choice

An individual or country that has a comparative advantage in the production of one good

• A) must have an absolute advantage in the good's production.
• B) must not have an absolute advantage in the good's production.
• C) may or may not have an absolute advantage in the good's production.
• D) must not have an absolute advantage in the production of the other good.

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Definitions:

Net Present Value

The discrepancy in the present valuation of incoming and outgoing cash flows within a certain timeframe.

Useful Life

The estimated duration of time a fixed asset is considered to be productive for its intended use.

Working Capital

is the difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the opportunity cost of capital.