In an Open Economy

question 44

Multiple Choice

In an open economy:

• A) a trade deficit is always good.
• B) a trade deficit is always bad.
• C) a trade deficit may be good or bad.
• D) a trade surplus is always bad.

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Definitions:

Sole Producer

A market situation where only one supplier exists for a particular good or service, often leading to monopolistic behaviour.

Average Revenue

The amount of money received by a firm per unit of output sold.

Average Variable Cost

The total variable costs divided by the quantity of output, representing the variable cost per unit of output produced.

Average Total Cost

The total cost of production divided by the total output or quantity produced, indicating the cost per unit of output.