When Two Countries Are Specializing and Trading with Each Other

question 9

Multiple Choice

When two countries are specializing and trading with each other, the gains from trade will tend to be greater when

• A)there are economies of scale in production.
• B)prices rise in both countries.
• C)the production possibilities boundaries shift inward.
• D)opportunity costs in the two countries are similar.
• E)comparative advantages are eliminated.

Understand the concept of flexible budgeting and its importance in financial planning.

Calculate budget variances and interpret whether they are favorable or unfavorable.

Analyze financial performance using flexible budget reports.

Apply cost and revenue formulas to generate budget reports.

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Definitions:

Plant Capacities

The maximum amount of products or services that a facility can produce over a given period of time under normal operating conditions.

Total Fixed Costs

The total of all expenses that stay the same, no matter the amount of goods or services produced by a company.

Inputs Variability

Inputs Variability refers to the fluctuations or variations in the factors of production used by firms in the production process, which can affect output levels and costs.

Soybeans Market

The economic market that deals with the buying and selling of soybeans, including its derivatives and products.