Comparative Advantage Refers to _____

question 90

Multiple Choice

Comparative advantage refers to _____

• A) the ability of an individual to produce a greater amount of a good than another individual.
• B) the ability of an individual to produce a lesser amount of a good than another individual.
• C) the ability of an individual to produce a good at a lower opportunity cost than another individual.
• D) the ability of an individual to produce a good at a lower dollar cost than another individual.
• E) the ability of an individual to produce a good using fewer labor hours than other individuals.

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Definitions:

Department Contribution Margin

A measure of a department's profitability, calculated as the difference between its sales and variable costs.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the efficiency of a company's core operations.

Direct Departmental Expenses

Costs that can be directly attributed to a specific department within an organization, such as salaries of departmental staff.

Indirect Expenses

Expenses that are not directly tied to the production of goods or services, such as administrative and marketing costs.