Which of the Following Statements Is True

question 54

Multiple Choice

Which of the following statements is true?

• A)All individuals in both countries are made better off as a result of international trade.
• B)Within each country, some individuals are made better off as a result of international trade, but one of the countries will be worse off overall.
• C)Although some individuals are made better off as a result of international trade, both countries may be made worse off overall.
• D)Each country as a whole is made better off as a result of international trade, but individuals within each country may be made worse off.

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Definitions:

Net Operating Income

The profit a company makes after deducting operating expenses but before interest and taxes from its total revenue.

Direct Labor Cost

The expense associated with employees who physically convert raw materials into the company's products; considered a variable cost.

Absorption Costing

A method of inventory costing that includes all manufacturing costs, both variable and fixed, in the cost of a product.

Variable Costing

An accounting method that only considers variable costs in determining the cost of goods sold and in calculating contribution margin.