Compared to Their Initial Positions at Points a and B,as

question 33

Multiple Choice

Compared to their initial positions at points A and B,as a result of complete specialization and trade,the output of the two countries added together in Figure 35.1 would result in an increase in

• A)Both DVD players and motorcycles.
• B)Motorcycles only.
• C)DVD players only.
• D)Neither DVD players nor motorcycles.

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Definitions:

Margin Of Safety

The difference between actual sales and breakeven sales, quantifying how much output or sales level can drop before a business incurs a loss.

Variable Expenses

Costs that change in direct proportion to changes in the level of activity or production volume, such as raw material costs.

Break-even Point

The point at which total revenue equals total costs, and no profit is earned or lost, often used to determine the feasibility of a business venture or product.

Unit Variable Expenses

Costs that vary directly with the production volume, calculated on a per-unit basis.