In 2000, the U

question 108

Multiple Choice

In 2000, the U.S.terms of trade was one.In 2009 the U.S.export price
Index was 1.15 and the U.S.import price index was 1.18.Which of the
Following statements is the best interpretation of the change in the U.S.
Terms of trade between 2000 and 2009?

• A)In 2009, the United States had to export 2% more in order to obtain the same amount of imports as in 2000.
• B)In 2009, the United States could export 2% less to obtain the same of amount of imports as in 2000.
• C)Prices of U.S.exports rose more rapidly than prices of U.S.imports.
• D)The U.S.terms of trade improved between 2000 and 2009.

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Definitions:

Economic Profits

Profits exceeding the opportunity costs of a company; considered an indicator of efficiency and entrepreneurship.

Average Total Cost

The total cost of production divided by the total quantity of goods produced, representing the cost per unit.

Average Variable Cost

The cost of labor and materials divided by the quantity of output produced, reflecting costs that change with the level of output.

Average Total Cost

The total cost of production divided by the quantity of output produced; it includes both fixed and variable costs.