The Impact of Increasing, as Opposed to Constant Costs Is

question 23

Multiple Choice

The impact of increasing, as opposed to constant costs is to:

• A)intensify and prolong the comparative advantages which any nation may have initially.
• B)expand the limits of the terms of trade.
• C)cause the basis for further specialization to disappear as nations specialize in accordance with comparative advantage.
• D)cause nations to realize economies of scale in those products in which they specialize.

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Definitions:

Service Department Charges

Expenses allocated to a company's operational departments that provide support or services to other internal departments rather than directly to customers.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding cost of goods sold, and may include rent, utilities, and salaries.

Departmental Expenses

Costs that are directly incurred by a specific department within an organization.

Indirect Expenses

Expenses incurred that are not directly tied to a specific product or service but are necessary for running the business, such as utilities or rent.