Comparative Advantage Refers To

question 77

Multiple Choice

Comparative advantage refers to:

• A)the ability of an individual to specialize and produce a greater amount of some good than another individual.
• B)the number of units of a good given up in order to acquire something.
• C)the ability of an individual to produce a good at a lower opportunity cost than some other individual can.
• D)the amount of labor a particular individual needs to produce a fixed amount of capital goods.
• E)the ability of an individual to produce a good using fewer labor hours than other individuals.

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Definitions:

Raw Materials Purchased

This refers to the cost of raw materials bought by a company for the purpose of production in manufacturing processes.

Average Inventory

The mean value of inventory held over a certain period of time, calculated to help businesses understand inventory turnover.

Factory Overhead

All indirect costs associated with manufacturing, including utilities, maintenance, and management salaries.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.