In a Two-Nation World, Comparative Advantage in the Production of a Particular

question 128

Multiple Choice

In a two-nation world, comparative advantage in the production of a particular product means that one nation can produce

• A) the product with fewer inputs than the other nation.
• B) the product at lower average cost than the other nation.
• C) the product at a lower domestic opportunity cost than the other nation.
• D) more of the product than the other nation.

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Definitions:

NPV

Net Present Value, a method to assess the profitability of an investment by comparing the present value of cash inflows to the present value of cash outflows.

NPV

Net Present Value is a financial measure that determines the discrepancy between the present value of money coming in and going out over a certain timeframe.

PI

Stands for Profitability Index, which measures the ratio of payoff to investment of a proposed project.

Dividends

Earnings distributed by an enterprise to its proprietors, commonly resulting from the firm's profit margins.