When Will the Domestic Price of a Product Equal the World

question 100

Multiple Choice

When will the domestic price of a product equal the world price

• A)when the domestic supply of the product increases
• B)when the country allows free trade
• C)when trade restrictions are imposed on the product
• D)when the country has a comparative advantage in producing the product

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Definitions:

Income Increases

The rise in earnings received by an individual or household, which can impact consumption, savings, and investment behaviors.

Opportunity Cost

Opportunity cost represents the value of the best alternative foregone when a decision is made to choose one option over another.

Optimum

Refers to the best or most favorable condition, value, or level of something.

Budget Constraint

A budget constraint represents the combination of goods and services that a consumer can purchase with their limited income.