Which of the Following Statements Is True

question 81

Multiple Choice

Which of the following statements is true ?

• A) Specialization and trade along the lines of comparative advantage allows nations to consume more than if they were to produce just for themselves.
• B) Free trade theory suggests that when trade takes place any gains made by one nation comes at the expense of another.
• C) According to the theory of comparative advantage, a nation should specialize in the production of those goods for which it has an absolute advantage.
• D) One country can have the comparative advantage in both goods, but it can only have the absolute advantage in one good as long as the opportunity costs are different.

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Definitions:

Entrepreneurs

Visionary individuals who create, manage, and assume the risks of a new business venture, bringing new products or services to the market.

Production Innovations

Refers to new or improved methods of producing goods and services, which can increase efficiency and reduce costs.

New Products

Goods or services that have been recently introduced to the market, offering new features or benefits not previously available.

Entrepreneurial Function

The activities and responsibilities undertaken by entrepreneurs, including innovation, risk taking, and managing and planning for businesses.