If a Country That Has a Comparative Advantage at Producing

question 129

Multiple Choice

If a country that has a comparative advantage at producing tea moves from autarky to free trade, what reaction would we expect to see in the world market?

• A)Domestic tea producers would be opposed.
• B)Foreign tea producers would be opposed.
• C)Foreign tea consumers would be opposed.
• D)Foreign producers would be in favor of.

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Definitions:

Profits Transfer

The reallocation of profits from one entity to another, often seen in corporate structures or international transactions to optimize tax liabilities.

Labor

The effort by humans directed toward producing goods and services in an economy.

Management

Management involves the planning, organizing, leading, and controlling of an organization's resources to achieve specific objectives.

Common Goals

Objectives shared by a group of people, aiming to achieve a mutual outcome or interest.