When a Country Allows Trade and Becomes an Importer of a Good

question 36

Multiple Choice

When a country allows trade and becomes an importer of a good, which of the following is NOT true?

• A)the gains of domestic consumers exceed the losses of domestic producers
• B)the losses of domestic producers exceed the gains of domestic consumers
• C)the price paid by domestic consumers of the good decreases
• D)the price received by domestic producers of the good decreases

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Definitions:

Operating Assets

Assets that are used for the day-to-day operations of a business, contributing to its ability to generate revenue.

Return On Investment

A measure of the financial gain or loss on an investment relative to the amount of money invested, usually expressed as a percentage.

Contribution Margin Ratio

The ratio of contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and profit.

Fixed Expenses

Expenses that remain the same regardless of the level of production or sales activities.