If a country produces a commodity in the range of decreasing returns to scale, and the country begins to export more in a pure free trade system, the domestic price of the commodity will
A. fall.
B. rise.
C. exceed the price in foreign countries.
D. be below the price in foreign countries.
E. One cannot predict the impact on the price of the commodity.
Answer: B
You might also like to view...
Tax increases on business income decrease aggregate demand by decreasing
A) business investment spending. B) government spending. C) consumption spending. D) wage rates.
Which of the following would decrease net exports in the United States?
A) A Mexican citizen purchases 100 shares of stock in IBM. B) The U.S. government donates $25 million to Mexico to help victims of a hurricane in Mexico. C) An American party planner purchases 350 piñatas from Mexico. D) The government of Mexico purchases 2,000 Dell laptop computers from the United States.
With which choice are you more likely to avoid Bid-rigging cartels?
a. Winning bids are not identified b. Winning bidders are not identified c. Cheaters do not fear punishment from other cartel members d. All of the above
The operation of the total economy can best be demonstrated by a
a. merry-go-round. b. circular flow. c. Ferris wheel. d. roller coaster.