Which of the Following Statements About Comparative Advantage Are True

question 120

Multiple Choice

Which of the following statements about comparative advantage are true?
1) A country's pattern of comparative advantage depends partly upon the relative abundance of different types of resources in its endowment of factors.
2) Trade allows small countries to reap economies of scale through specialization.
3) Climate affects a country's pattern of comparative advantage.

• A)1 and 2
• B)2 and 3
• C)1,2,and 3
• D)1 only
• E)2 only

---

Definitions:

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts in order to verify that debits equal credits.

Prepaid Expenses

Upfront costs incurred for items or services that are to be obtained in the upcoming time.

Accrued Expenses

Expenses that have been incurred but not yet paid, representing liabilities on the balance sheet.

Assets

Assets are resources controlled by a company as a result of past events and from which future economic benefits are expected to flow to the entity.