Which of the Following Is Not Correct

question 131

Multiple Choice

Which of the following is not correct?

• A)The producer who requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.
• B)The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X.
• C)The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good.
• D)The gains from specialization and trade are based not on comparative advantage but on absolute advantage.

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Definitions:

Interest on Construction Loan

The interest that accrues on a loan taken out to finance the construction of a building or other project, traditionally capitalized and added to the project's cost base.

Expense Account

A type of account used in accounting to track money spent or costs incurred by a business in its operational activities.

Straight-Line Method

A method of calculating the depreciation of an asset, which evenly spreads the cost of the asset over its useful life.

Residual Value

The estimated salvage value of an asset at the end of its useful life.