A Person Has a Comparative Advantage in an Activity Whenever

question 59

Multiple Choice

A person has a comparative advantage in an activity whenever he or she

• A) can perform the activity at a lower opportunity cost than anyone else.
• B) can do everything better than anyone else.
• C) can do the activity in less time than anyone else.
• D) has an absolute advantage in the activity.

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Definitions:

Actual Costs

The real, specific expenses incurred or required to perform an operation, produce an item, or offer a service.

Standard Costs

Predetermined costs to manufacture a single unit or a number of units during a specific period under current or anticipated operating conditions.

Total Materials Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, used to evaluate cost control.

Budgeted Units

The quantity of products or services that a company plans to sell or produce within a specific period, as outlined in its budget.