Under Free Trade,Canada Would Not Enjoy Any Gains from Trade

question 109

Multiple Choice

Under free trade,Canada would not enjoy any gains from trade with Sweden if Canada:

• A) Trades at the Canadian rate of transformation
• B) Trades at Sweden's rate of transformation
• C) Specializes completely in the production of its export good
• D) Specializes partially in the production of its export good

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Definitions:

Assembly Department

a division within a manufacturing plant where components are put together to create a final product.

Direct Labor Hour

The amount of time employees directly involved in manufacturing spend on producing a specific unit of output.

Factory Overhead Rates

Calculated rates used to allocate a factory's indirect costs to products being produced, aiding in determining total production costs.

Plantwide Rate

A single, uniform overhead absorption rate used throughout an entire factory or plant, applied to all units irrespective of the department in which the costs were incurred.