Comparative Advantage Is Determined by

question 58

Multiple Choice

Comparative advantage is determined by

• A)the amount of resources needed to produce a good
• B)the money cost of producing any good
• C)the opportunity cost of producing any good
• D)absolute advantage and production possibilities combined
• E)the level of demand for a good

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Definitions:

Depreciation Expense

Spreading out the price of a tangible asset over the period it can be used.

Variable Cost

The costs that vary directly with the level of production or with the volume of services provided.

Fixed Cost

Expenses that remain constant for a company regardless of its level of production or sales volume, such as leases and managerial salaries.

Salvage Company

A firm that specializes in recovering and processing materials from failed projects or discarded products.