The Main Reason Why One Nation Trades with Another Is

question 136

Multiple Choice

The main reason why one nation trades with another is to

• A)save its natural resources from rapid depletion.
• B)exploit the advantages of specialization.
• C)eliminate the danger of retaliation from other nations.
• D)improve political alliances.

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Definitions:

Diminishing Marginal Utility

The principle stating that as a person consumes more of a good or service, the satisfaction gained from each additional unit decreases.

Utility Maximizer

An economic concept referring to consumers who select goods or services in a way that maximizes their total satisfaction or utility.

Utility From Milk

The satisfaction or benefit a consumer receives from consuming milk, assessing its nutritional value and taste preferences.

Optimal Consumption Rule

A guideline suggesting that to maximize utility, consumers should allocate their budget in a way that the last dollar spent on each good or service yields the same level of marginal utility.