The Costs of Production May Be Lowered If a Firm

question 74

Multiple Choice

The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because:

• A) wages and other overheads may be higher in an FTZ.
• B) locally-produced components do not qualify for tariffs.
• C) unassembled goods may qualify for lower freight rates.
• D) the finished goods are exported to other countries.
• E) goods imported in an FTZ qualify for the same level of tariffs as other imported goods.

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Definitions:

Digitization

The conversion of text, pictures, or sound into a digital form that can be processed by a computer.

Mega Themes

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A senior executive role responsible for overseeing and driving the strategic direction of an organization's entire supply chain, from procurement to distribution.

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