Figure 3-5 the Graph Below Represents the Various Combinations of Cars

question 43

Multiple Choice

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.)

-Refer to Figure 3-5.Under which of the following circumstances would Country A be able to consume outside of its production possibilities frontier?

• A)Under no circumstances is that possible.
• B)Country A trades with Country B; Country A has a comparative advantage over Country B in producing corn; and Country A specializes in car production.
• C)Country A trades with Country B; Country A has a comparative advantage over Country B in producing cars; and Country A specializes in car production.
• D)Country A trades with Country B; Country A has an absolute advantage over Country B in producing cars; and Country A specializes in car production.

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Definitions:

Direct Labor

The cost of wages paid to workers directly involved in the production of goods or services.

Job Order Cost Sheets

Documents that record and track the costs associated with a specific job or order.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used in creating the good.

Work in Process Inventory

Items of inventory that are in the process of being produced but are not yet finished goods.