Absolute Advantage Is

question 47

Multiple Choice

Absolute advantage is

• A) the ability to produce more output from given inputs than another producer can.
• B) the ability to produce a good at a lower opportunity cost than other producers.
• C) is always a relative concept.
• D) the ability to produce all goods at lower costs than anyone else can.

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Definitions:

Trend Analysis

A type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, before accounting for other expenses.

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Cost Of Goods Sold

Refers to the total expense directly related to the production of goods or services a company sells.