When a country participates in international trade, its consumption possibilities
A. Always exceed its production possibilities.
B. Must still equal its production possibilities.
C. May increase, but its trading partners consumption possibilities will decrease.
D. Will increase if it is a rich country and will decrease if it is a poor country.
Answer: A
You might also like to view...
Assume there is an improvement in technology that increases the marginal product of each unit of labor. This would have the effect of:
A) reducing the average total cost, average variable cost, and marginal cost of production. B) increasing the average total cost, average variable cost, and marginal cost of production. C) reducing the average variable cost and marginal cost of production, but average total cost would be unchanged. D) reducing the average total cost and average variable cost of production, but marginal cost would be unchanged.
Wilson can produce a maximum of 6 volleyballs (VBs) or 18 footballs (FBs). Spalding can produce a maximum of 8 VBs or 32 FBs. Which of the following is true?
a) Spalding has an absolute advantage in producing FBs. b) Spalding has an absolute advantage in producing VBs. c) Spalding has a comparative advantage in producing VBs. d) All of the above are true. e) A and B are true.
Oligopolies exist only in industries that produce large durable goods such as automobiles and refrigerators
Indicate whether the statement is true or false
Which of the following is most important for the achievement of higher income levels and living standards?
a. production of additional goods and services that people value highly relative to the cost of their production b. increases in government spending that create jobs c. restriction of imports that expand employment in the protected industries d. an increase in total employment