The Principle of _____ Explains Why France Can Produce White

question 101

Multiple Choice

The principle of _____ explains why France can produce white wine at a lower opportunity cost than the neighboring country of Germany.

• A)comparative advantage
• B)absolute advantage
• C)capital ferment
• D)opportunity-cost replacement

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Definitions:

Effective Interest Method

An accounting practice used to amortize bond premiums or discounts over the life of the bond in a way that reflects a constant rate of interest.

Straight-Line Method

A depreciation method that allocates an equal amount of the asset's cost to each year of the asset's useful life.

Issuance Price

The price at which shares or bonds are sold to the public for the first time.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, assessing the value today of an amount to be received in the future.