The Product Life Cycle Theory of Comparative Advantage Predicts That

question 55

Multiple Choice

The product life cycle theory of comparative advantage predicts that a new product will be first produced and exported by:

• A)the nation that first demanded the new product.
• B)the first firm to successfully copy the technology.
• C)the nation in which it was invented.
• D)the countries with the most stable economies and the fewest restrictions on foreign trade.
• E)the company with the most extensive network of international distributors for the product.

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Definitions:

Percent Of Fixed Assets

A financial ratio that indicates what portion of a company's total assets are made up of fixed assets, such as property, plant, and equipment.

Vertical Analysis

This is a method in financial statement analysis where each line item is listed as a percentage of another item. For income statements, each expense is presented as a percentage of sales, and on the balance sheet, each asset, liability, or equity is presented as a percentage of total assets.

Quick Assets

Cash and other current assets that can be easily converted to cash, such as temporary investments and accounts receivable.

Vertical Analysis

Vertical Analysis is a financial statement analysis tool that presents each item in the financial statement as a percentage of a base figure for the same period, facilitating ratio comparisons.