When,in Our Analysis of the Gains and Losses of International

question 125

Multiple Choice

When,in our analysis of the gains and losses of international trade,we assume that a country is small,we are in effect assuming that the country

• A)cannot experience significant gains or losses by trading with other countries.
• B)cannot have a significant comparative advantage over other countries.
• C)cannot affect world prices by trading with other countries.
• D)All of the above are correct.

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good or service and the amount of it that producers are willing to supply at that price.

Elastic Demand

A condition where the quantity demanded of a good or service significantly changes in response to a change in its price.

Efficiency Loss

The decrease in economic effectiveness that occurs when a good or service does not reach or cannot reach its equilibrium state.

Excise Tax

A type of tax imposed on specific goods, services, or activities, often with the goal of discouraging their use or consumption.