Which of the Following Is an Implication of the Law

question 138

Multiple Choice

Which of the following is an implication of the law of comparative advantage?

• A) Countries with small amounts of labor relative to capital should specialize in producing labor-intensive commodities.
• B) Since workers in high-income countries utilize larger amounts of capital than workers in less developed nations, trade between capital-rich and capital-poor nations results in the exploitation of labor in the less developed countries.
• C) Countries that are high cost producers of agricultural products should trade those products for goods they can produce only at a low opportunity cost.
• D) Countries that are low opportunity cost producers of timber products should trade those products for goods they can produce only at a high opportunity cost.

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Definitions:

Predictable Variability

The expected or forecasted fluctuation in demand, supply, or other business variables that can be anticipated and planned for.

Demand

The amount of a product or service that consumers are willing and able to purchase at various prices.

Price Promotion

A marketing strategy that temporarily reduces the price of a product or service to stimulate consumer purchasing.

Low Demand

A situation where the desire and need for certain products or services are beneath expectations, often leading to surplus inventory and reduced sales.