According to the Law of Comparative Advantage, When One Country

question 55

Multiple Choice

According to the law of comparative advantage, when one country sells goods for which it has the comparative advantage in production and buys goods for which it does not have the comparative advantage in production

• A) total output will fall.
• B) buyers of goods will win and sellers of goods will lose.
• C) total output to each person can be expanded.
• D) sellers of goods will win and buyers of goods will lose.

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Definitions:

Beginning Inventory

Beginning inventory is the value of inventory on hand at the start of an accounting period, before any purchases or production have been added.

Goods Available

The total quantity of goods that a company has for sale, including both products on hand and those being produced.

Gross Profit Rate

A financial metric that calculates the percentage of sales revenue remaining after deducting the cost of goods sold.

Sales Returns

Refers to the process of products being returned by customers to the seller for a refund or exchange.