If, for Example, the Textile Industry in a Nation Is

question 31

Multiple Choice

If, for example, the textile industry in a nation is characterized by vigorous domestic rivalry, which of the following observations of this nation's international competency is most likely to be true?

• A) The nation will have access to such basic factors of the textile industry as natural resources.
• B) The nation's textile firms will have a competitive advantage in international trade.
• C) The domestic customers of the textile firms will be less demanding.
• D) The nation's textile industry will lack the advanced factors that are necessary to be internationally competent.

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Definitions:

Lemons

In economic terms, refers to the problem of asymmetric information regarding the quality of products, especially used goods that are subpar or defective.

Peaches

Refers to the sweet, juicy fruit from the Prunus persica tree, often consumed fresh, canned, or used in culinary preparations.

Adverse Selection

A phenomenon in markets where buyers or sellers have information that one party to a transaction does not have, leading to an inefficient allocation of resources.

Adverse Selection

Adverse selection refers to a situation where buyers and sellers have different information, leading to transactions where the buyer or seller is at a disadvantage.