When the Principle of Comparative Advantage Is Used to Guide

question 44

Multiple Choice

When the principle of comparative advantage is used to guide trade, then a country specializes in producing only

• A) goods with the highest opportunity cost.
• B) goods with the lowest opportunity costs.
• C) goods for which production takes fewer worker-hour than another country.
• D) goods for which production costs are more than average total costs.

---

Definitions:

Revenue Centre

A segment, division, or unit of a business responsible for generating revenue, focusing on sales activities rather than profit or cost efficiencies.

Performance Measure

An assessment tool used to evaluate the effectiveness and efficiency of an individual's or organization's actions.

Standard Cost Variances

The differences between the estimated costs of production and the actual costs incurred.

Business Unit Reports

Financial or analytical documents that provide information on the performance of distinct divisions within a company.