Comparative Advantage

question 42

Multiple Choice

Comparative advantage

• A)is also known as relative efficiency.
• B)can lead to trade even in the face of absolute efficiency.
• C)exists when one party can produce a good or service at a lower opportunity cost than another party.
• D)all of the above

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Definitions:

Equivalent Units

A concept used in cost accounting to denote the amount of completed units that could have been produced given the total amount of direct materials and labor consumed.

Materials Requisitions

Documents or requests used within a company to authorize the retrieval or usage of materials from inventory for production purposes.

Process Cost System

An accounting system that accumulates manufacturing costs and then assigns them to a large number of identical or similar units of output, common in continuous manufacturing environments.