Asked by Samantha Valadez on May 01, 2024
Verified
Under international trade we export those goods for which we have a relatively low
A) materials cost.
B) wage cost.
C) accounting cost.
D) opportunity cost.
E) overhead cost.
Opportunity Cost
The sacrifice of prospective advantages from other possibilities when one option is selected.
International Trade
The exchange of goods and services between countries, which can involve exports, imports, and the trading of resources.
- Apprehend the significance of opportunity costs in shaping trade associations.
Verified Answer
JL
Jackson LefeverMay 06, 2024
Final Answer :
D
Explanation :
Under international trade, we try to export goods for which we have a relatively lower opportunity cost. Opportunity cost refers to the cost of an alternative that must be forgone to pursue a certain action or choice. In simple terms, it means the cost of the best alternative foregone. Therefore, we try to export those goods where we have a comparative advantage and a lower opportunity cost compared to other countries. This enables us to specialize in the production of goods that we can produce efficiently and at a lower cost, and import goods that we cannot produce efficiently.
Learning Objectives
- Apprehend the significance of opportunity costs in shaping trade associations.
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