Which of the Following Statements Is Correct

question 57

Multiple Choice

Which of the following statements is correct?

• A)Mrs.Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers.Mrs.Lovejoy is therefore investing in companies that are allocatively efficient.
• B)Mrs.Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers.Mrs.Lovejoy is therefore investing in companies that are productively efficient.
• C)Mrs.Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost.Mrs.Lovejoy is therefore investing in companies that are allocatively efficient.
• D)Mrs.Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost.Mrs.Lovejoy is therefore investing in companies that are both allocatively and productively efficient.

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Definitions:

World Price

The price at which goods are traded internationally, determined by global supply and demand conditions.

Trade Restrictions

Measures implemented by governments to control or limit the flow of goods and services across borders, including tariffs, quotas, and import bans.

Domestic Supply

The total amount of goods and services that are produced within a country's borders and available for domestic consumption or export.

International Specialization

A method where countries or regions focus on producing goods and services they are most efficient at, to enhance global trade efficiency.