What Does It Mean for a Country If the World

question 67

Multiple Choice

What does it mean for a country if the world price of a product is higher than its domestic price

• A)The country should import that product.
• B)The country should no longer produce that product.
• C)The country has a comparative advantage in that product.
• D)The country could benefit by imposing a tariff on that product.

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Definitions:

Marginal Cost

The additional cost incurred to produce one more unit of a good or service.

Variable Cost Curve

A graphical representation that shows how total variable costs change with variations in output volume, helping firms visualize cost dynamics related to production levels.

Fixed Labor Cost

Expenses that do not change with the level of production or sales, such as salaries that must be paid regardless of the company's level of output.

Salaried Manager

A manager who is paid a fixed annual amount rather than an hourly wage, often receiving benefits such as healthcare.