Assume the Cost of Transporting Autos from Japan to Canada

question 57

Multiple Choice

Assume the cost of transporting autos from Japan to Canada exceeds the pretrade price difference for autos between Japan and Canada.Trade in autos is:

• A) Impossible
• B) Possible
• C) Highly profitable
• D) Moderately profitable

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Definitions:

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods and services, aiming to measure satisfaction or happiness.

Consumption

Households' utilization of goods and services.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.