What Should a Country Do If It Has a Comparative

question 22

Multiple Choice

What should a country do if it has a comparative advantage in a product?

• A) It should import that product.
• B) It should export that product.
• C) It should keep the product for domestic use since it is relatively inexpensive to produce.
• D) It should lower the costs of production until realizing an absolute advantage.

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Definitions:

Equivalent Units

Equivalent units are a concept in cost accounting used to express the amount of work done during a period in terms of fully completed units of output, facilitating the calculation of cost per unit.

Job Order

A work authorization for a specific task or project, often including details such as materials, labor, and overhead costs.

Cost Of Production Report

A document that summarizes the production and cost activity within a specific period, often used in process costing environments.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.