The Reason That Most of the Coffee That Is Consumed

question 169

Multiple Choice

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

• A) Colombia has an absolute advantage in producing coffee relative to the United States.
• B) Colombia has a comparative advantage in producing coffee relative to the United States.
• C) coffee cannot be grown in the United States.
• D) government trade disincentives regarding Colombian coffee make such trade possible.

---

Definitions:

Activity Increases

A term indicating a rise in the level of business or production activities.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing towards covering fixed costs and profit.

Gross Margin

The difference between sales revenue and the cost of goods sold, divided by revenue, expressed as a percentage, indicating the financial health and profitability of a company's core activities.

Net Operating Income

The profit realized from a business's operations after subtracting all operation-related expenses from gross income.