If There Is No Comparative Advantage in the Production of Either

question 109

Multiple Choice

If there is no comparative advantage in the production of either of the two goods produced by countries 1 and 2,then

• A) the benefits resulting from trade between the two countries are increased.
• B) there are no gains from specialization and trade between the two countries.
• C) one country must be more productive in producing all goods than the other.
• D) each country should specialize in the production of a particular good.
• E) none of the above

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Definitions:

Adjusting Journal Entry

A journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period, ensuring that financial statements adhere to the accrual basis of accounting.

Revenue Account

An account that tracks the income earned from normal business operations.

Expense Account

An income statement account that represents the cost of goods sold, operating expenses, and non-operating expenses.

Income Statement

A financial report that shows the revenues, expenses, and profit or loss of a company over a specific accounting period.