We Are Investigating the Relationship Among Three Variables

question 294

Multiple Choice

We are investigating the relationship among three variables.We have graphed two of them.Suppose that the variable that is not measured on the x-axis or the y-axis changes.Then,there is

• A) a movement along the plotted curve.
• B) a shift in the plotted curve.
• C) no impact on the plotted curve because the variable is not measured on either of the axes.
• D) an omitted variable.
• E) a violation of the absence of trend assumption.

---

Definitions:

Gains From Trade

The extra output that trading partners obtain through specialization of production and exchange of goods and services.

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than its competitors, leading to more efficient international trade.

Domestic Opportunity Cost

The cost of forgoing the next best alternative use of resources within a particular country when choosing one economic action over others.

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than others.