A Country That Produces and Consumes a Large Amount of Cell

question 4

Multiple Choice

A country that produces and consumes a large amount of cell phones comparatively has just entered the world market. If the country becomes a net-importer of coffee, we would expect to see:

• A)an increase in both the world price and world quantity of cell phones.
• B)an increase in the world price of cell phones and a decrease in the world quantity of cell phones.
• C)a decrease in both the world price and world quantity of cell phones.
• D)a decrease in the world price of cell phones and an increase in the world quantity of cell phones.

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Definitions:

Selling Commission

A fee paid to a salesperson or agent for facilitating a sale, typically a percentage of the sale price.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Variable Expenses

Expenses that fluctuate with changes in production volume or business activity levels, including materials, labor, and utilities.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and contribute to profit.