Which of the Following Best Describes the Principle of Comparative

question 80

Multiple Choice

Which of the following best describes the principle of comparative advantage?

• A) Some people can produce the same good better than other producers can.
• B) Someone has the ability to produce the same good using fewer inputs than another producer.
• C) Someone has the ability to produce the same good for the lowest opportunity cost.
• D) To produce more of one good, people have to produce less of another good.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from the total revenue.

Initial Value Method

An accounting approach where investments are recorded at their initial purchase cost without subsequent adjustment for changes in market value.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements that helps in combining the financial information of parent and subsidiary entities.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.