If a Country Has a Lower Opportunity Cost in Producing

question 110

Multiple Choice

If a country has a lower opportunity cost in producing a good than its trading partners,then it has:

• A) A comparative advantage in producing the good.
• B) Favorable terms of trade in producing the good.
• C) An absolute advantage in producing the good.
• D) Lower labor costs in producing the good.

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Definitions:

Gross Profit

is the difference between the revenue generated from sales and the cost of goods sold, indicating the financial health and profitability of a company's core activities.

Net Profit

The amount of money that remains from revenues after all the operating expenses, taxes, and costs have been subtracted.

Discounts

Reductions applied to the regular price of goods or services, often to stimulate sales or clear out inventory.

Value Analyses

The process of examining the function of goods or services to reduce costs without affecting quality, thereby increasing customer value.