Sound business decision making requires a firm understanding of both microeconomic and macroeconomic concepts

A firm has increasing returns to scale if:

A. a proportional change in the use of all inputs produces a more than proportional change in output. B. a proportional change in the use of all inputs produces a less than proportional change in output. C. a proportional change in the use of all inputs produces the same proportional change in output. D. an increase in capital leads to an increase in output.

A country has a comparative advantage in a good if

A. It always has an absolute advantage in the production of the good. B. It can produce more of the good than another country. C. It can specialize only in two goods. D. It can produce a good at a lower opportunity cost relative to another country.