A Country Has a Comparative Advantage in a Good If

question 133

Multiple Choice

A country has a comparative advantage in a good if

• A)It can produce more of the good than another country.
• B)It can produce a good at a lower opportunity cost relative to another country.
• C)It can specialize only in two goods.
• D)It also has an absolute advantage in the production of the gooD.A country has a comparative advantage in a good or service if it can produce it at a lower opportunity cost compared to another country.

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Definitions:

Direct Labor

The cost associated with the work of employees directly involved in the production of goods or services.

Departmental Overhead Rate Method

A costing method that calculates different overhead rates for each department within a factory, based on each department's specific operational costs.

Overhead Rate

A calculation used to allocate indirect costs to produced goods based on a certain measure, like labor hours or machine hours.

Allocation Base

A criterion or standard used to distribute costs among different cost objects, such as departments or products.