When Ford and General Motors Import Automobile Parts from Mexico

question 76

Multiple Choice

When Ford and General Motors import automobile parts from Mexico at prices below those they must pay in Canada,who is worse off

• A)Workers who assemble Ford and General Motors vehicles become worse off.
• B)Canadian consumers, taken as a group, become worse off.
• C)Mexican consumers, taken as a group, become worse off.
• D)Canadian companies that manufacture automobile parts become worse off.

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Definitions:

Marginal Revenue

The extra revenue earned from the sale of an additional unit of a product or service.

Maximize Profits

The process by which a firm adjusts its production and pricing strategies to earn the highest possible profit.

Economic Profits

Profits calculated by subtracting both the explicit and implicit costs of production from total revenues.

Monopolistically Competitive

Describes a market type where numerous sellers offer differentiated products, leading to competitive yet non-homogeneous markets.