Which Industrialization Policy Used by Developing Countries Places Emphasis on the Comparative

question 21

Multiple Choice

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

• A) export promotion
• B) import substitution
• C) international commodity agreements
• D) Infant Industry promotion
• E) intra-industry trade practice

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Definitions:

Variable Cost

Costs that vary in proportion to the level of production or business activity.

Total Revenue

The full amount of income generated by the sale of goods or services before any expenses are subtracted.

AVC Curve

The Average Variable Cost (AVC) Curve graphically represents how the cost per unit changes as the level of output is altered, typically showing a U-shaped curve due to economies and diseconomies of scale.

MC Curve

Marginal Cost Curve, which depicts the change in total cost that arises when the quantity produced is incremented by one unit.