What Is the Logic Behind Comparative Advantage

question 51

Multiple Choice

What is the logic behind comparative advantage?

• A) Through specialization and trade, one country will always prevail.
• B) Through specialization and trade, two or more countries are made better off.
• C) Through specialization and trade, global resources are preserved.
• D) Through specialization and trade, technological advances are promoted.

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Definitions:

Price Reduction

A decrease in the selling price of a product or service, typically with the aim of increasing demand or sales volume.

Value-Based Pricing

A pricing strategy where the price is based on the perceived value of a product or service to the customer rather than on the cost of production or a traditional market price.

Operating Cost

Expenses associated with the day-to-day activities of running a business, excluding costs related to financing and investments.

Useful Life

The period of time over which an asset is expected to be useful in the operations of a business.