Use the Following to Answer Questions

question 8

Multiple Choice

Use the following to answer questions:
Figure: Comparative Advantage
-When countries produce those goods for which they have a comparative advantage:

• A) total production and consumption will increase in all countries.
• B) trade will increase, but production will decrease.
• C) at least one country will be worse off; maximizing production comes from producing those goods for which they have the absolute advantage.
• D) they are maximizing their opportunity costs.

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Definitions:

Monopsonist

A market situation where there is only one buyer for many sellers, giving the single buyer significant control over prices and terms of purchase.

Competitive Labor Market

A market scenario where numerous buyers (employers) and sellers (workers) freely interact to determine the wages and employment conditions without significant restrictions or monopoly power.

Profit-Maximizing Level

The production output level at which a business achieves the highest possible profit, where marginal cost equals marginal revenue.

Total Labor Cost

The complete expenditure incurred by an employer for the compensation of employees, including wages, benefits, and taxes.