With the existing resources in these 2 countries, Wakanda can produce 42 TVs or 14 cars; and Gotham can produce 50 TVs or 25 cars. Wakanda should import cars from Gotham and export TVs to Gotham at the same time. *

True

False

The law of diminishing return says that as you consume anything, like milk, the level of satisfaction you're going to get as you continue to consume the milk is going to decrease over time. *

True

False

It is not possible for an individual or country to have a comparative advantage in all goods. There will be some other individual or country that can produce some things at lower opportunity costs. *

True

False

If the price elasticity of a product is 1.7, as the price of a product decreases by 1%, the quantity demand for that product will increase by more than 1%. *

True

False

Key Drivers of International Trade include demography, geography, and topography of a county. *

True

False

With the existing resources in these 2 countries, Wakanda can produce 42 TVs or 14 cars; and Gotham can produce 50 TVs or 25 cars. The opportunity cost of producing one car in Wakanda is 2 TVs whereas, the opportunity cost of producing one car in Gotham is 3 cars. Hence, Wakanda has a comparative advantage in producing cars over Gotham. *

True

False

With the existing resources in these 2 countries, Wakanda can produce 42 TVs or 14 cars; and Gotham can produce 50 TVs or 25 cars. The opportunity cost of producing one TV in Wakanda is 1/3 cars whereas, the opportunity cost of producing one TV in Gotham is 1/2 cars. Hence, Wakanda has a comparative advantage in producing TV over Gotham. *

True

False

What are the most important assumptions in International Economics is that efficiency should outweigh the effectiveness of a country. *

True

False

If the price is elastic, an increase in the price would reduce the total revenue of a product. *

True

False

Production Possibility Frontier or PPF refers to the ability to produce goods and services at a lower opportunity cost *

True

False

Comparative advantage indicates which nation is best at producing a given good, whereas absolute advantage is an indication of which nation stands to lose the least by choosing to produce one good versus another. *

True

False

A fall in the prices of exported goods in international markets would increase the Terms of Trade, while a rise in the prices of imported goods would increase it. *

True

False

International trade is the exchange of goods and services between nations. *

True

False

With the existing resources in these 2 countries, Wakanda can produce 42 TVs or 14 cars; and Gotham can produce 50 TVs or 25 cars. If Wakanda exchanges 4 TVs for 1 car with Gotham, Gotham will be benefitting from this trade as well. *

True

False

Comparative advantage refers to the uncontested superiority of a country to produce a particular good better. *

True

False

Opportunity cost is the opportunity you are giving up by making a choice. It compares choosing one option over another, and how much the producer benefits or loses by doing so. *

True

False

The law of demand states that there's an inverse relationship between price and quantity supplied. This means when the price goes down, the quantity demanded decreases. *

True

False

According to the international trade theory, even if a country has an absolute advantage over another, it can still benefit from specialization. *

True

False

gains from trade results from the ability of two countries to increase their consumption possibilities by specializing in the good in which they have comparative advantage and trading for a good in which they do not have a comparative advantage *

True

False

Economics is a social science concerned with the production, distribution, and consumption of goods and services. *

True

False

Specialization occurs when an individual or a country allocates most or all of its resources towards the production of a particular good or service. *

True

False

Absolute advantage refers to the ability to produce more or better goods and services than somebody else. *

True

False

The concept of demand for a product is the same as the quantity demanded for a product. Similarly, the term supply means the same as the quantity supplied. *

True

False

With the existing resources in these 2 countries, Wakanda can produce 42 TVs or 14 cars; and Gotham can produce 50 TVs or 25 cars. Hence, Gotham has an absolute advantage in producing cars whereas Wakanda has an absolute advantage in producing TVs. *

True

False

World Trade Organization (WTO) is an international forum that establishes the rules of international trade and allows members to deal with trade issues. *

True

False

An increase in the productive efficiency of a country determines its gains from trade as it lowers the cost of production and price of the goods. As a result, the country importing gains by importing cheap goods. *

True

False

The price of related goods and a change in the number of consumers can shift the demand for a product. *

True

False

One of the main reasons for growing International Trade in Canada is the presence of its North-West water passage. *

True

False

Foreign Exchange Risks are a result of a country's policies that leads to international trade barriers because of protectionism and tariffs on imported goods. *

True

False

A trade surplus exists when a country imports more than it exports. A trade deficit is when a country exports more than it imports. *

True

False

The demand curve for X goods is Xd=100-10P and the supply curve is MCx=1. The demand curve for Y goods is Yd=100-20P and the supply curve is MCy=1. A tax of $2 per unit on goods X and no tax on goods Y.
a. Calculate tax revenues and excesses in X goods.
b. Explain the total tax revenue and excess burden if you reduce the tax on goods X to one dollar and impose one dollar per unit on goods Y.
c. Explain which tax system is more desirable.

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally planned to work 22,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

ou have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 16,000 machine-hours and produced 10,000 units. The company had originally planned to work 18,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 14,000 machine-hours and produced 8,000 units. The company had originally planned to work 16,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Cost Formula Actual Cost in March Utilities $16,400 plus $0.17 per machine-hour $ 21,430 Maintenance $38,200 plus $2.00 per machine-hour $ 70,000 Supplies $0.50 per machine-hour $ 9,300 Indirect labor $94,300 plus $2.00 per machine-hour $ 133,200 Depreciation $67,900 $ 69,600 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending v ariances for March.

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for Ma