Suppose Country a and Country B Are the Only Two

question 26

Multiple Choice

Suppose country A and country B are the only two countries in the world. Country A imports good X from country B and exports good Y. In the absence of any transportation cost, at the world price of good X:

• A)country B's export supply curve is perfectly inelastic.
• B)both country A's import demand curve and country B's export supply curve are positively sloped.
• C)country A's import demand curve will be perfectly inelastic.
• D)country A's import demand curve will intersect country B's export supply curve.

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Definitions:

Equipment

Assets used in the operation of a business or manufacturing process, which have a long-term use and value.

Income Ratio

A financial metric that compares various incomes to a particular benchmark, such as net income to sales or investment income to total assets.

Sharing Income

The distribution of profits among partners or shareholders in a business, often according to the proportion of ownership.

Current Asset

An asset likely to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.