Which of the Following Observations Is True of the Principle

question 200

Multiple Choice

Which of the following observations is true of the principle of comparative advantage?

• A)It arises from the absolute cost advantage.
• B)It helps determine most efficient patterns of production.
• C)It was advanced by Adam Smith.
• D)It means producing a good using smaller quantities of resources than others.

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Definitions:

Objective Function

A mathematical expression representing the goal of an optimization problem, typically to maximize or minimize certain values.

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Objective Function

A mathematical function used in decision-making, optimization, or problem-solving that specifies the objective to be maximized or minimized.

Maximize Contribution

A financial strategy or goal to increase the difference between total sales and total variable costs to maximize the profit contributed towards fixed costs and earnings.