-A Country Exports a Good If

question 5

Multiple Choice

-A country exports a good if

• A) the world price of the good is above the country's no-trade equilibrium price.
• B) the world price of the good is below the country's no-trade equilibrium price.
• C) it has a high opportunity cost of production.
• D) it cannot import the good.
• E) the quantity demanded of the good in the country is greater than the quantity supplied at the world price.

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Definitions:

Production

The process of creating, growing, manufacturing, or improving goods and services.

Production Possibility Curve

A graphical representation showing the maximum combination of goods and services that can be produced with a given set of resources and technology.

Comparative Advantage

The aptitude of any individual, corporation, or country for producing a good or offering a service at an opportunity cost that is reduced in comparison to that of the competition.

Specialization

The process of focusing resources on the activities that lead to the greatest efficiency and output in production or services.