In a Two-Sector (Manufacturing and Agriculture) Specific-Factors Model

question 52

Multiple Choice

In a two-sector (manufacturing and agriculture) specific-factors model:

• A) land, labor, and capital are transferable between sectors.
• B) labor is transferable between sectors.
• C) land is transferable between sectors.
• D) capital is transferable between sectors.

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Definitions:

Variable Selling Expense

Costs that vary directly with the volume of sales or production, such as commissions and shipping charges.

Fixed Selling Expense

The costs associated with selling a product or service that do not vary with sales volume, such as salaries of sales staff and advertising expenses.

Variable Administrative Expense

Costs associated with administrative activities that vary with the level of business activity or output.

Reclassifying Costs

The process of moving costs from one category to another in accounting records.