Which of the Following Is Correct? Trade

question 177

Multiple Choice

Which of the following is correct? Trade

• A)Trade allows a person to consume at a point outside his production possibilities frontier.
• B)Trade limits a person's ability to produce goods and services on her own.
• C)Trade must benefit both traders equally.
• D)Trade is based on absolute advantage.

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Definitions:

Applied to Production

Pertaining to costs or accounting methodologies directly associated with the manufacturing or creation process of goods or services.

Work in Process Inventory

Goods partially completed but not yet ready for sale, particularly in manufacturing, representing an ongoing production stage.

Direct Materials

Basic substances that are specifically identifiable in the creation of a particular product.

Indirect Materials

Materials used in the production process but not directly traceable to a finished product, such as lubricants and cleaning supplies.