Foreign Trade

question 104

Multiple Choice

Foreign trade

• A)benefits only small countries that cannot produce everything.
• B)benefits only large countries that have a comparative advantage in producing everything.
• C)can benefit no country.
• D)can benefit small or large countries.
• E)benefits only small countries that have a comparative disadvantage.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand.

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.

Marginal Cost

Incremental expenditure incurred by manufacturing an additional unit of a product or service.

Selling Price

The price at which a product or service is sold to customers.