Comparative Advantage Arises Because

question 112

Multiple Choice

Comparative advantage arises because:

• A) all resources are equally effective in the production of goods.
• B) the division of labor increases efficiency.
• C) the division of labor helps market function effectively.
• D) not all resources are equally effective in the production of goods.

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Definitions:

Material Price Variance

The difference between the actual cost of materials and the expected (or standard) cost.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or budgeted) cost, based on predetermined rates and actual hours worked.

Variable Overhead Rate Variance

The gap between what was actually spent on variable overhead and what was predicted to be spent, considering the actual activity level.

Rate Variances

Differences between the standard or expected rates of costs and the actual rates incurred, often analyzed in cost accounting.