If a Country Allows Trade And, for a Certain Good

question 58

Multiple Choice

If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,

• A) the country will be an exporter of the good.
• B) the country will be an importer of the good.
• C) the country will be neither an exporter nor an importer of the good.
• D) Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

---

Definitions:

Variable Manufacturing Overhead

Refers to the production costs that fluctuate with the level of output, such as utility costs or raw materials, which are not directly tied to individual units.

Materials Quantity Variance

The difference between the expected and actual quantity of materials used in production, impacting materials cost.

Standard Quantity

This represents the expected amount of materials or inputs needed to produce a unit of product under normal conditions.

Actual Output

Actual output is the factual quantity of goods or services produced within a specified time frame, representing productivity.