When Canada and the United States Permitted Free Trade in Cars

question 47

Multiple Choice

When Canada and the United States permitted free trade in cars, Canadian automobile

• A)exports to the United States did not change.
• B)production costs increased.
• C)production increased.
• D)consumers paid higher prices.
• E)production decreased.

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Definitions:

Private Value

The value of a good or service to an individual buyer or seller which is independent of the market price or the value others might derive from it.

Externalities

Results of business activities on external entities not considered in the product or service's price.

Cars And Trucks

General categories of motor vehicles primarily used for transportation of people (cars) and goods (trucks).

Socially-Optimal Quantity

The level of production and consumption that achieves the largest possible economic efficiency, taking into account the external effects on society.