Refer to the Graph Shown

question 54

Multiple Choice

Refer to the graph shown. If Countries X and Y face the production possibility curves A and B, respectively, Country Y has a comparative advantage in the production of:

• A)neither agricultural goods nor industrial goods.
• B)both agricultural goods and industrial goods.
• C)agricultural goods only.
• D)industrial goods only.

Evaluate the effects of tax policies on economic behavior and fairness.

Understand the historical context and arguments concerning tax policy debates.

Analyze the equity and efficiency implications of various tax proposals.

Understand the definition and implications of tax incidence.

---

Definitions:

Business

An economic system where goods and services are exchanged for one another or for money, on the basis of their perceived value.

Factor Market

A factor market is a marketplace for the services of factors of production, such as labor, capital, and land, where these are bought and sold.

Circular Flow

An economic model depicting the continuous movement of money, goods and services, and factors of production between producers and consumers in the economy.

Household

An economic unit that consists of all individuals who occupy a housing unit, regardless of their relationship.