According to the Law of Comparative Advantage, If a Firm

question 114

Multiple Choice

According to the law of comparative advantage, if a firm or a nation desires to maximize its output, each productive assignment should be carried out by those who

• A) have the highest opportunity cost.
• B) have the lowest opportunity cost.
• C) have an absolute advantage in the productive activity.
• D) can complete the productive activity most rapidly.

Recognize the impact of external environments and behavioral perspectives on human actions and experiences.

Acknowledge the ethical and practical implications of psychological research and therapy.

Understand the basic characteristics and classifications of bonds.

Comprehend the concept of yield to maturity and its calculation.

---

Definitions:

Vertical Mergers

Mergers between companies at different stages of production within the same industry, aimed at increasing efficiency or control over the supply chain.

Interlocking Directorates

A situation where the members of a board of directors serve on the boards of multiple corporations, potentially leading to conflicts of interest.

Price-fixing

A form of market manipulation where competitors collude to set prices at a certain level, rather than allowing them to be determined naturally by market forces, which is illegal in many jurisdictions.

Tying Contracts

Agreements where a seller conditions the sale of one product (the tying product) on the buyer's agreement to purchase a separate product (the tied product).