A Country Has a Comparative Advantage If It Can Produce

question 143

Multiple Choice

A country has a comparative advantage if it can produce a good or service

• A) at a higher opportunity cost than can other nations.
• B) at a lower opportunity cost than can other nations.
• C) by using less resources than other nations.
• D) that lies outside its production possibilities curve.

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Definitions:

Direct Labor

Labor costs that can be directly traced to the production of specific goods or services, such as wages for assembly line workers.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs and activity levels.

Manufacturing Overhead

All indirect manufacturing costs, including indirect labor, materials, and other expenses not directly tied to the production of goods.

Finished Goods

Finished goods refer to completed products that are ready for sale but have not yet been sold to customers.