In the Situation in Question #8 Above, If the Countries

question 7

Multiple Choice

In the situation in Question #8 above, if the countries engage in trade at posttrade prices (terms of trade) of 1 shirt = 0.5 brandy, then

• A) France gets all the gains from trade.
• B) the United States gets all the gains from trade.
• C) neither country gains from trade.
• D) the two countries share equally in the gains from trade.

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Definitions:

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant to allocate overhead costs to production activities.

Machine Hours

A measure of production time, calculated as the total number of hours machines are operated in the production process.

Overhead Assigned

The process of allocating indirect costs, such as utilities or rent, to specific products or departments within a company.

Allocation Base

a criterion or measure used for distributing costs evenly across various departments or products.