After Trade Opens,the Short Run Impact on the Income of the Specific

question 9

Multiple Choice

After trade opens,the short run impact on the income of the specific factor that is relatively scarce will be

• A)a decrease in its income.
• B)an increase in its income.
• C)no change in its income.
• D)indeterminate, income effects are not possible to know.

---

Definitions:

Firms

Business entities or organizations that produce goods or provide services with the aim of making a profit, often operating within specific industries or markets.

Economic Theory

A set of principles and models that explains how economies operate and how economic agents interact.

Total Profit

The difference between a firm's total revenue and its total costs, indicating the overall financial gain from its business activities.

Principle of Marginal Analysis

The principle of marginal analysis involves making decisions based on the additional benefits and costs of an action compared to its alternatives.