Figure 9-18

question 211

Multiple Choice

Figure 9-18.On the diagram below,Q represents the quantity of peaches and P represents the price of peaches.The domestic country is Isoland.
-Refer to Figure 9-18.If Isoland allows international trade and if the world price of peaches is $5,then

• A)Isoland has a comparative advantage,relative to other countries,in producing peaches.
• B)Isoland will import peaches.
• C)consumer surplus with trade exceeds consumer surplus without trade.
• D)All of the above are correct.

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Definitions:

Cultural Values Theory

The view that people in groups use members’ opinions about the position valued in the wider culture, and then adjust their views in that direction for social approval reasons.

Group Polarisation

The tendency of a group to make decisions that are more extreme than the initial inclination of its members.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Risky Shift

Tendency for group discussion to produce group decisions that are more risky than the mean of members’ pre-discussion opinions, but only if the pre-discussion mean already favoured risk.