If There Are Two Goods and Two Countries, Then One

question 205

Multiple Choice

If there are two goods and two countries, then one country can have

• A) a comparative advantage in only one good.
• B) a comparative advantage in both goods.
• C) a higher opportunity cost of producing both goods.
• D) a lower opportunity cost of producing both goods.

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Definitions:

Unit Product Cost

Unit product cost is the total cost associated with producing one unit of a product, including all variable and fixed costs.

Direct Labor Cost

The total expense a company incurs for employees who work directly on the manufacturing or production of products.

Variable Costing

An accounting method that only allocates variable costs to inventory, treating fixed costs as expenses of the period.

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) divided by the number of units produced, representing the cost per individual unit.