With Equal Technology Nations Will Have Equal K/L in Production

question 12

Multiple Choice

With equal technology nations will have equal K/L in production if:

• A)factor prices are the same
• B)tastes are the same
• C)production functions are the same
• D)all of the above

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Definitions:

Absorption Costing

An accounting method where all of the costs associated with manufacturing a product are absorbed by the units produced.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of production, such as rent and salaries of managers.

Fixed Manufacturing Overhead

The consistent, indirect costs associated with manufacturing that do not vary with the level of production, such as rent, insurance, and salaries of permanent staff.

Variable Costing

A costing method that includes only variable production costs (direct materials, direct labor, and variable overhead) in product costs, excluding fixed overhead.