Despite Specialization and Comparative Advantage, Household Productionstill Exists Because for Some

question 105

Multiple Choice

Despite specialization and comparative advantage, household productionstill exists because for some households

• A)the opportunity cost of production at home is greater than the cost of purchasing the good in the
• Market
• B)production at home is less costly than purchasing the good in the market
• C)the value of home production exceeds the sunk cost of home production
• D)the value of home production is ignored
• E)food and clothing expenditures represent a small portion of their total budget

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Definitions:

IPO

Initial Public Offering, the process by which a private company offers shares to the public for the first time.

Private Placement

An offering of securities not made through the public market, but rather directly to a select group of investors or institutions.

Firm Commitment Basis

An underwriting method where an underwriter agrees to buy all securities offered by the issuer and assumes full risk of selling them to investors.

Rights Offering

A strategy by which companies raise additional capital, by giving existing shareholders the right to purchase additional shares at a predetermined price, usually at a discount.