In the Specific Factors Model, the Effects of Trade on Welfare

question 15

Multiple Choice

In the specific factors model, the effects of trade on welfare overall are ________ and for fixed factors used to produce the exported good they are ________.

• A) positive; positive
• B) positive; ambiguous
• C) negative; positive
• D) positive; negative
• E) ambiguous; positive

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Definitions:

Cost of Goods Sold

The immediate expenses directly linked to the manufacturing of products sold by a firm, such as labor and materials used.

Finished Goods Inventories

The stock of completed products that are ready to be sold but have not yet been purchased or distributed.

Credit Balance

The amount of money credited to an account, indicating the sum that a financial institution or vendor owes to the account holder.

Manufacturing Overhead

A rephrasing of Factory Overhead, encompassing all indirect costs associated with the manufacturing process, such as utilities, maintenance, and management salaries.