When Free Trade Prevails,the

question 70

Multiple Choice

When free trade prevails,the

• A) domestic prices of imported items rise and of exported items decline.
• B) domestic prices of both imported and exported items rise.
• C) domestic prices of exported items rise in the exporting country and decline in the importing country.
• D) domestic prices of imported and exported items remain the same.
• E) laws of supply and demand are replaced by the law of comparative advantage.

---

Definitions:

Cost Of Goods Sold

The total cost directly associated with producing goods that have been sold, including materials, labor, and manufacturing overhead.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost, often used to assess purchasing performance.

Labor Rate Variance

The variance between the real labor expenses incurred and the anticipated standard labor costs for the achieved production output.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the expected (or standard) costs, based on the efficient use of resources.