The Principle of Comparative Advantage States That

question 40

Multiple Choice

The principle of comparative advantage states that

• A) whoever has a comparative advantage in producing a good or service also has the absolute advantage
• B) whoever has an absolute advantage in producing a good or service also has the comparative advantage
• C) whoever can produce a good or service using fewer resources than another individual has the comparative advantage
• D) total production of every good or service can be greater if individuals specialize according to their comparative advantage
• E) comparative advantage is maximized if each individual specializes according to his or her absolute advantage

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Definitions:

FDA

The Food and Drug Administration, an agency of the U.S. Department of Health and Human Services responsible for protecting public health by ensuring safety and efficacy of drugs, biological products, and medical devices.

Liability

Legal responsibility for one's actions or inactions, which may result in financial restitution or penalties.

Fiduciary Duty

A legal obligation requiring one party (the fiduciary) to act solely in another party's (the beneficiary's) interest when managing the latter's assets, involving loyalty and care.

Shareholder's Legal Duties

Obligations imposed on shareholders, including acting in the best interest of the corporation and adhering to corporate laws and regulations.