A Country That Specializes

question 103

Multiple Choice

A country that specializes:

• A)spends all of its resources producing a particular good.
• B)spends all of its resources producing those goods it has an absolute advantage in producing.
• C)spends all of its resources producing only what other countries need.
• D)spends all of its resources producing what it can make more of than anyone else.

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Definitions:

Increased Demand

Describes a situation where a larger number of consumers are willing and able to purchase a good or service at a given price, often leading to higher prices or a market shortage if supply does not increase correspondingly.

Price Ceiling

A legally established maximum price that can be charged for a good or service, preventing prices from reaching equilibrium levels.

Surplus

A situation where the quantity of a product supplied exceeds the quantity demanded, often resulting in a decrease in prices.

Shortage

A shortage occurs when the demand for a product exceeds the supply of that product at a specific price.