Suppose Iceland Goes from Being an Isolated Country to Being

question 53

Multiple Choice

Suppose Iceland goes from being an isolated country to being an exporter of coats.As a result,

• A)consumer surplus increases for consumers of coats in Iceland.
• B)producer surplus increases for producers of coats in Iceland.
• C)total surplus remains unchanged in the coat market in Iceland.
• D)it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production.

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Definitions:

Decentration

The ability to consider multiple aspects of a situation simultaneously, an important cognitive development in children allowing more complex thought processes.

Concrete-Operational Children

A developmental stage in Piaget's theory, typically from ages 7 to 11, when children gain a better understanding of concrete events and logical operations but still struggle with abstract concepts.

Egocentric

The habit of interpreting all events and situations with regard to one's own personal perspective, neglecting the viewpoints or emotions of other people.

Transitivity

In logic and mathematics, a property of relations that states if relation A exists between B and C, and relation A also exists between C and D, then A must exist between B and D as well.