When a Country Has the Ability to Produce More of a Good

question 124

Multiple Choice

When a country has the ability to produce more of a good than others with a given amount of resources, it:

• A)has an absolute advantage.
• B)has a comparative advantage.
• C)it a free-trader.
• D)should remain self-sufficient.

---

Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Overall Profitability

An assessment of a company's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Perpetual Inventory System

An inventory accounting technique that instantly logs the sale or acquisition of inventory using computerized point-of-sale systems and enterprise asset management software.