International Trade Tends to Be Complete, Rather Than Partial, When

question 71

Multiple Choice

International trade tends to be complete, rather than partial, when which of the following occurs?

• A) constant opportunity cost
• B) increasing opportunity cost
• C) negative opportunity cost
• D) positive opportunity cost

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Definitions:

Variable Cost

Costs that change in proportion to the good or service that a business produces, varying depending on production volumes.

Fixed Costs

Fixed costs refer to expenses that do not change with the level of goods or services produced by the business within a certain range of activity or over a certain period.

Sensitivity Analysis

A technique used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated by subtracting the present value of cash outflows from the present value of cash inflows.