Which of the Following Most Accurately States the Economic Significance

question 146

Multiple Choice

Which of the following most accurately states the economic significance of exchange?

• A) Physical goods have value because they exist; exchange can neither increase nor decrease their value.
• B) Exchange creates value by permitting trading partners to expand total output as the result of specialization in areas where they have a comparative advantage.
• C) Exchange creates value by moving goods from people who value the goods less to people who value the goods more.
• D) Both b and c are true.

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Definitions:

Raw Materials

Basic materials that are used to produce goods, finished products, or intermediate materials which are feedstock for future finished products.

Raw Materials Inventory

Stock of materials that are to be used in the production of goods, not yet processed or incorporated into finished products.

Raw Materials

Raw Materials are the basic substances or components that are converted through manufacturing processes into finished goods.

Raw Materials Inventory

Items and supplies held in stock that are used in the manufacturing process to create finished goods.