A Country Exports a Good If

question 161

Multiple Choice

A country exports a good if

• A) it has a high opportunity cost of production.
• B) the world price of the good is below the country's no-trade equilibrium price.
• C) the world price of the good is above the country's no-trade equilibrium price.
• D) the quantity demanded of the good in the country is greater than the quantity supplied at the world price.
• E) it cannot import the good.

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Definitions:

Compound Interest

The process of computing interest by including both the primary sum borrowed or deposited and the interest that has previously accumulated over time.

Estimated Cost

A prediction or approximation of the cost of goods or services, based on current and past information, before the actual expense is known.

Net Present Value

A method used in capital budgeting to determine the profitability of an investment by calculating the sum of its present values of all expected future cash flows.

Present Value Index

A financial metric used to evaluate the present value of future cash flows in relation to the initial investment, also known as the profitability index.