The Impact of Increasing, as Opposed to Constant, Costs Is

question 56

Multiple Choice

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

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

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Definitions:

Master Budget

A number of separate but interdependent budgets that formally lay out the company’s sales, production, and financial goals and that culminates in a cash budget, budgeted income statement, and budgeted balance sheet.

Master Budget

A comprehensive financial plan that includes all of the smaller budgets within a company, projecting all of its financial activities for a fiscal year.

Interdependent Budgets

Budgets that are connected and rely on figures from each other, illustrating the financial and operational relationships within an organization.

Production Budget

A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.