Which of the Following Statements Is True

question 179

Multiple Choice

Which of the following statements is true?

• A) When two firms have the same opportunity cost of producing two goods, each firm will always have a comparative advantage in the production of both goods.
• B) When two firms have different opportunity costs of producing two goods, each firm will always have a comparative advantage in the production of one of the goods.
• C) The firm that has a lower opportunity cost of producing a good is said to have a comparative disadvantage in the production of that good.
• D) The firm that faces a lower opportunity cost of producing a good is said to have an absolute disadvantage in the production of that good.

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Definitions:

Hierarchical

Relating to the classification or arrangement of individuals or entities based on rank, order, or authority within a structure.

Public Sector Bargaining

The negotiation process between government employers and unions representing public sector employees to settle terms of employment.

Federal Level

Pertains to the national government level, as opposed to state or local levels, often in reference to laws, regulations, or administrative agencies.

BATNA

Best Alternative To a Negotiated Agreement, the most advantageous course of action a party can take if negotiations fail and an agreement cannot be reached.