If Wages Are Higher in the United States Than in Brazil

question 60

Multiple Choice

If wages are higher in the United States than in Brazil, then:

• A) trade is still beneficial to the United States and Brazil.
• B) Brazil will not have a comparative advantage in the production of any good.
• C) the United States cannot have a comparative advantage in the production of any good.
• D) trade with Brazil will clearly lower wages in the United States.

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Definitions:

Sales Supplies Used

Pertains to the total cost of sales or promotional materials consumed or utilized during a particular period.

Selling and Administrative Expense

Selling and administrative expense includes costs related to the selling of products and the management of the business, excluding production costs.

Factory Overhead

Costs tied to manufacturing processes, excluding those for direct labor and materials.

Office Utilities

Expenses associated with the essential services used in an office, such as electricity, water, gas, and internet.