Consider the Following Information About the Production of Two Goods,X

question 77

Multiple Choice

Consider the following information about the production of two goods,X and Y,in two countries,A and B:
∙ In Country A it takes X_a units of resources to produce one unit of X and Y_a units of resources to produce one unit of Y.
∙ In Country B it takes X_b units of resources to produce one unit of X and Y_b units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
-Refer to Table 32-1.If is less than ,we can conclude with certainty that

• A)The opportunity cost of producing good X in Country A is less than in Country B.
• B)Country A has a comparative advantage in the production of good X.
• C)Country A has an absolute advantage in the production of good X.
• D)The price of good X in Country A is less than the price in Country B.
• E)The opportunity cost of producing good X in Country A is higher than in Country B.

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Definitions:

Multiple Departmental Rate

A method used in cost accounting whereby different overhead rates are applied to respective departments within a company, reflecting their varying costs.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant, calculated by dividing total overhead costs by total base units, often labor hours or machine hours.

Volume-Related Measures

Metrics that determine the effects of production or sales volume changes on costs and revenues.

Overhead Costs

Expenses not directly tied to the production of goods or services, like rent, utilities, and administrative costs.