When the Nation of Brownland First Permitted Trade with Other

question 191

Multiple Choice

When the nation of Brownland first permitted trade with other nations,domestic producers of wheat experienced an increase in producer surplus of $4 million and total surplus in Brownland's wheat market increased by $1 million.We can conclude that

• A)Brownland became an exporter of wheat.
• B)consumer surplus in Brownland increased by $3 million.
• C)the opening of trade caused the domestic supply curve for wheat in Brownland to shift to the left.
• D)this example is inconsistent with the economic theory of international trade.

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Definitions:

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, usually expressed as a percentage.

Profit Margin

A measure of profitability calculated as net income divided by revenue.

Equity Financing

The method of raising capital through the sale of shares in a company, giving investors ownership interests.

Current Liabilities

Obligations or debts a company expects to settle within one fiscal year or its operating cycle, whichever is longer.