A Country Will Be Able to Consume a Combination of Goods

question 44

Multiple Choice

A country will be able to consume a combination of goods that is not attainable solely from domestic production if

• A) the world terms of trade differ from its domestic relative costs.
• B) the country specializes in one product.
• C) the country avoids international trade.
• D) the world terms of trade equal the domestic relative costs.
• E) the country's domestic production value equals world relative value.

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Definitions:

Variable Expenses

Costs that vary in direct proportion with the level of production or sales volume, such as raw materials and sales commissions.

Traceable Fixed Expenses

Fixed costs that are directly associated with a specific department or product, and can be directly traced to it.

Minimum Required Rate Of Return

The lowest acceptable return on an investment, determined by an investor's or company's risk tolerance.

Average Operating Assets

Refers to the average value of the assets employed in a business's operations over a certain period of time, used to assess operational efficiency and return on investment.