If with One Hour of Labor Time Nation a Can

question 16

Multiple Choice

If with one hour of labor time nation A can produce either 3X or 3Y while nation B can produce either 1X or 3Y (and labor is the only input) :

• A) Px/Py=1 in nation A
• B) Px/Py=3 in nation B
• C) Py/Px=1/3 in nation B
• D) Px/Py=3 in nation A

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Definitions:

Direct Materials Cost

The cost of raw materials that are directly involved in the production of a product, easily traceable to the finished product.

Standard Direct Materials

The predetermined cost and quantity of raw materials expected to be used in manufacturing a product.

Standard Costs

Predetermined or budgeted costs serving as a benchmark for evaluating actual performance and cost control.

Cost Control

The practice of identifying and reducing business expenses to increase profits, involving the analysis and management of cost elements.