Which of the Following Statements Is True

question 3

Multiple Choice

Which of the following statements is true?

• A) A self-sufficient country can, at best, consume on its production possibilities frontier.
• B) Only countries with an absolute advantage in the production of every good should strive to be self-sufficient.
• C) A self-sufficient country consumes outside its production possibilities frontier.
• D) Self-sufficiency is the road to prosperity for most countries.

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Definitions:

Labor Rate

The amount paid per hour of labor, including wages and sometimes additional benefits, for direct and indirect labor.

Direct Materials Purchase Budget

A financial plan that estimates the raw materials required for production and their associated costs, aiding in financial and operational planning.

Ending Inventories

The total value of all unsold goods that a company has in stock at the end of an accounting period.

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production goals, part of the overall budgeting process.