If Two Countries Begin Trade and Both Produce a Product

question 13

Multiple Choice

If two countries begin trade and both produce a product subject to internal economies of scale,then the country with the ________ rate of production will ________ production until it controls ________ of the market.

• A) higher; increase; 100%
• B) higher; increase; 50%
• C) lower; increase; 100%
• D) lower; increase; 50%
• E) higher; decrease; 0%

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Definitions:

Agent's Conduct

Agent's conduct refers to the actions and behavior of an agent while acting on behalf of a principal, which must align with the principal's instructions and the laws governing the agency relationship.

Employer

An individual or organization that hires and pays people to work.

Motivated

Having a strong desire or willingness to act or accomplish something; driven by certain motives or incentives.

Legally Nonexistent Principal

A legal concept referring to a supposed entity or person in a transaction who, in fact, does not have legal existence.