Comparative Advantage Is Based on the

question 57

Multiple Choice

Comparative advantage is based on the

• A) "gains from trade" concept.
• B) idea of economic superiority.
• C) absolute opportunity costs of producing goods in different countries.
• D) relative opportunity costs of producing any good in one country.
• E) relative opportunity costs of producing goods in different countries.

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Definitions:

Average Collection Period

A metric that calculates the average time taken to receive payments from customers, indicating the efficiency of a company's credit and collection policies.

Days' Sales In Inventory

A financial metric indicating the average number of days that a company holds its inventory before selling it.

Full-Capacity Level

The maximum level of output a company can produce and sell with its current resources and without incurring significant additional costs.

Operating Capacity

The maximum amount of work that an organization can complete in a given period under normal circumstances.