Examples of Comparative Advantage Show How Trade Between Two Countries

question 182

Multiple Choice

Examples of comparative advantage show how trade between two countries can make each better off.Compared to their pre-trade positions,trade makes both countries better off because in each country

• A)total employment is greater.
• B)total consumption of goods is greater.
• C)wages are higher.
• D)total welfare is greater.

---

Definitions:

Past Cost Data

Historical financial information regarding the costs incurred by a business.

Ideal Standards

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage; also called theoretical standards.

Machine Breakdowns

Refers to the unexpected failures or malfunctions of machinery that disrupt the production process or operations.

Materials Spoilage

The portion of raw materials that becomes unusable and is discarded during the production process.