Voluntary Exchanges Generate

question 119

Multiple Choice

Voluntary exchanges generate:

• A)surplus, leaving both participants better off than they were before.
• B)deadweight loss, leaving both participants worse off than they were before.
• C)deadweight loss, leaving at least one participant worse off than they were before.
• D)a transfer of surplus from one participant to another.

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Definitions:

Tariffs

Taxes imposed by a government on imported goods to increase their price and protect domestic industries from foreign competition.

Predatory Dumping

The practice of selling a product in a foreign market at a price below its cost of production to undercut local competitors and gain market share.

Domestic Production

The total value of all goods and services produced within a country’s borders, reflecting the output of its economy.

Monopoly Position

A market situation in which a single company or entity has exclusive control over the production and sale of a particular good or service.