Suppose an American Worker Can Make 50 Pairs of Gloves

question 11

Multiple Choice

Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day.On the other hand,a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day.Using the concepts of absolute and comparative advantage,we can say that the United States has the comparative advantage in:

• A) the production of both gloves and radishes.
• B) neither the production of gloves nor radishes.
• C) the production of gloves only.
• D) the production of radishes only.

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Definitions:

Fixed Overhead Budget Variance

The variance between the budgeted and the actual incurred fixed overhead expenses.

Manufacturing Overhead Applied

The portion of estimated manufacturing overhead cost that is assigned to each unit of production based on a predetermined rate.

Labor-Hour

A labor-hour represents an hour of work performed by an employee, typically used as a basis for allocating labor costs or measuring productivity.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to utilities, maintenance, and factory equipment depreciation.