It Is More Realistic to Assume Diminishing Returns to Specialization

question 80

Multiple Choice

It is more realistic to assume diminishing returns to specialization when evaluating the theory of comparative advantage.This is because:

• A)there exist differences in the prices of resources in different countries.
• B)resources can move freely from the production of one good to another within a country.
• C)not all resources are of the same quality.
• D)different goods use resources in the same proportions.

Understand the concept of present value and how to calculate it in the context of leasing versus buying decisions.

Grasp the impact of depreciation, including straight-line and MACRS, on tax shields and cash flows.

Differentiate between operating leases and financial leases and understand their characteristics.

Identify the factors affecting the net advantage to leasing (NAL) and how to compute it.

---

Definitions:

AFL-CIO

The American Federation of Labor and Congress of Industrial Organizations, a federation of labor unions in the United States.

Manufacturing Firms

Companies involved in the transformation of raw materials, components, or parts into finished goods that meet a consumer's demand or specifications.

Unionized Workers

Employees who are members of a union, a group that negotiates with employers for better wages, benefits, and working conditions.

Minimum Wage

Minimum wage is the lowest legal remuneration that employers are allowed to pay their workers, established by government laws.