Trade Between Two Nations Would NOT Be Possible If They

question 124

Multiple Choice

Trade between two nations would NOT be possible if they have

• A) identical community indifference curves but different production possibilities frontiers.
• B) identical production possibilities frontiers but different community indifference curves.
• C) different production possibilities frontiers and different community indifference curves.
• D) identical production possibilities frontiers and identical community indifference curves.

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Definitions:

Pure Competition

A market structure in which a very large number of firms sells a standardized product, into which entry is very easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers.

Market Price

The current price at which a good or service can be bought or sold in the open market.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource, such as labor or capital.

Resource Price

The cost of inputs used in the production of goods or services, such as labor, raw materials, and capital.