Which of the Following Is True About Absolute Advantage

question 75

Multiple Choice

Which of the following is true about absolute advantage?

• A) It is the ability to produce more of a good than another producer with the same quantity of inputs.
• B) All countries will produce the same amount of goods with the same quantity of inputs.
• C) Individuals, companies, and countries should specialize in what they do best.
• D) A product that might be in the mature stage in one country might be in the introductory stage in another market.
• E) A business can realize higher profits by setting up operations in countries where the costs of labor and resources are lower than the costs in the domestic market.

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Definitions:

Property Turnover

A measure of how efficiently a company generates revenue from its assets, often by comparing sales to the average value of property, plant, and equipment.

Current Asset Turnover

A financial metric that measures how efficiently a company uses its current assets to generate revenue, revealing asset management effectiveness.

Interest Coverage

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt.

Cash Flow From Operations

represents the net amount of cash generated by a company's normal business operations, excluding financing and investing activities.