The Primary Benefit That Results When a Nation Employs Its

question 80

Multiple Choice

The primary benefit that results when a nation employs its resources in accordance with the principle of comparative advantage is

• A) an expansion in investment resulting from a reallocation of resources away from consumption.
• B) a larger output resulting from a more efficient use of resources.
• C) greater equality of income resulting from an increase in the number of workers.
• D) an increase in the profitability of business enterprises resulting from an increase in investment.

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Definitions:

Overapplied

This refers to the condition in which the allocated costs in an accounting system exceed the actual costs incurred, often in the context of overhead or indirect costs in manufacturing.

Variable Component

Part of a cost or expense that changes in proportion with the level of activity or volume of output.

Fixed Component

A portion of a cost that does not change with the level of production or sales over the short term.

Overapplied

A scenario in which the overhead costs allocated are higher than the overhead costs that were actually incurred.