In a Two-Nation Model, the Equilibrium World Price Will Occur

question 163

Multiple Choice

In a two-nation model, the equilibrium world price will occur where:

• A)one nation's export supply curve intersects the other nation's import demand curve.
• B)both nations' exports are exactly twice the level of imports.
• C)both nations' export supply curves are horizontal.
• D)both nations' import demand curves are vertical.

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Definitions:

Profit-Maximizing Quantity

The output level at which a firm achieves the maximum possible profit, considering its cost structure and market demand.

Power Cords

Electrical cables that deliver power from an outlet or source to an electronic device or appliance.

Market Wage Rate

The prevailing rate of pay for work in a particular labor market or industry.

Profit-Maximizing Quantity

The level of output at which a firm achieves the highest possible profit, determined by the point where marginal cost equals marginal revenue.