If France Is Better Than Latvia at Producing Wine,but Latvia

question 92

Multiple Choice

If France is better than Latvia at producing wine,but Latvia is better than France at producing lumber,what should happen

• A)Latvia should sell lumber to France, and should buy French wine.
• B)Latvia should impose a tariff on French wine in order to protect jobs in the Latvian lumber industry.
• C)Latvia should subsidize its wine industry so that it can compete with French wine.
• D)Latvia should put a quota on the amount of French wine imported.

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Definitions:

Industry Supply

The total output of goods or services that producers in an industry are willing and able to sell at different price levels, during a certain time period.

Long-run Supply Curve

A graphical representation showing the relationship between market price and the amount of goods supplied by producers, considering all factors of production can be varied.

Competitive Industry

An industry with many firms competing against each other, with no single firm dominating the market.

Relevant Resources

Resources that are directly applicable and valuable in achieving a specific goal or solving a particular problem.