The Principle of Comparative Advantage Indicates That Mutually Beneficial International

question 5

Multiple Choice

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

• A)tariffs are eliminated.
• B)transportation costs are almost zero.
• C)relative costs of production differ between nations.
• D)a country can produce more of some product than other nations can.

Understand the effects of information presentation on decision-making biases.

Recognize the role and challenges of decision-making at various levels of management.

Understand the methodological approaches to solving different types of problems.

Understand the concept and implications of bounded rationality in decision-making.

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Definitions:

Rent

Payment made periodically by a lessee to a lessor for the use of land, a building, or another property.

Profits

The financial gain obtained when revenue from business activities exceeds expenses and taxes.

GDP

Gross Domestic Product is defined as the cumulative monetary or market value of all the finished products and services generated inside a country during a particular time frame.

Final Goods

Products that have completed the production process and are ready for sale to the consumer or end-user, excluding intermediate goods used in production.