What Determines a Country's Limits to Acceptable Terms of Trade

question 138

Multiple Choice

What determines a country's limits to acceptable terms of trade?

• A) Their opportunity costs in production.
• B) Whether they possess the absolute advantage in the production of a good.
• C) How much a country likes a good for which they are trading.
• D) When a country has a comparative advantage in production of both goods.

---

Definitions:

Economic Income

The total value of all income received by individuals or corporations, including both realized and unrealized gains.

Net Worth

The total value of all assets owned by an individual or corporation, minus the total value of all liabilities owed at a point in time.

Consumption

Consumption denotes the use of goods and services by households, representing the final purchase of goods and services to satisfy wants and needs.

Net Worth

The total assets minus total liabilities of an individual or company, representing the financial value of the entity.