(Figure: Gadgets and Widgets) According to the Graph, Which Statement

question 242

Multiple Choice

(Figure: Gadgets and Widgets) According to the graph, which statement is correct?

• A) Total output would rise if Country A specialized in gadgets and Country B specialized in widgets.
• B) Total output would rise if Country B specialized in gadgets and Country A specialized in widgets.
• C) There are no gains from trade.
• D) Total output would fall if Country B specialized in gadgets and Country A specialized in widgets.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Marginal Cost

The financial outlay required to produce a further unit of a product or service.

Pollution Abatement

Actions taken to reduce, control, or eliminate pollution from sources in order to protect the environment.