Underlying the Theory of Comparative Advantage Are Assumptions Regarding

question 12

Multiple Choice

Underlying the theory of comparative advantage are assumptions regarding

• A)free trade between nations.
• B)that the factors of production (land, labor, capital, and entrepreneurial ability) are relatively immobile.
• C)that the factors of production (land, labor, capital, and entrepreneurial ability) are relatively mobile.
• D)a and b

---

Definitions:

Investment Opportunity

A potential venture or avenue through which an investor can put money into assets or projects expecting a favorable financial return.

Combined Return On Investment

A measure assessing the total financial return of different investments or the aggregate performance of an entire investment portfolio.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, contributing to covering fixed costs and generating profit.

Residual Income

The net income that exceeds the minimum required return on investment or capital; often used as a performance measure in managerial accounting.