Which of the Following Statements Is True

question 107

Multiple Choice

Which of the following statements is true?

• A) Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it.
• B) Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner.
• C) Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product.
• D) Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product.

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Definitions:

Commoditization

The process in which goods or services become interchangeable with others in the same market, leading to competition primarily on price.

Mature Markets

Markets that have reached a state of equilibrium characterized by the absence of significant growth or innovation.

Transactional Marketing

A business strategy focusing on single, "point of sale" transactions, emphasizing maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.

Buyer-Seller Relationship

The interaction and ongoing connections between a buyer and a seller, often focusing on long-term engagement rather than one-time transactions.