Which Statement Defines Absolute Advantage

question 158

Multiple Choice

Which statement defines absolute advantage?

• A) Goods and services that are produced at their lowest resource (opportunity) cost.
• B) The mix of goods and services produced is just what the society desires.
• C) One country has a lower opportunity cost of producing a good than another country.
• D) One country can produce more of a good than another country if both work with identical resources.

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Definitions:

Rate of Return

The enhancement or diminution in an investment’s value over a fixed span, presented as a percentage of the investment’s original price.

Rate of Return

The upward or downward movement in the value of an investment across a predefined period, depicted as a percentage of the initial investment cost.

Equipment

Tangible physical assets used in the operation of a business, such as machinery, computer hardware, and vehicles, that have a longer life expectancy and are not intended for resale.

Cash Flows

The complete financial movement into and out of a trade, greatly influencing its operational liquidity.