Relative to a No-International-Trade Initial Situation, If the United States

question 105

Multiple Choice

Relative to a no-international-trade initial situation, if the United States had a comparative advantage in wine production and exported wine, the U.S. domestic price of wine:

• A)​would rise, but domestic output would fall.
• B)​would fall, but domestic output would rise.
• C)​would rise, and domestic output would rise.
• D)​would fall, and domestic output would fall.

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Definitions:

Venture Capitalism

The practice of investing in early-stage companies with strong growth potential in exchange for equity stakes.

Equity Stake

An ownership interest in a company through the holding of its stock, indicating a financial share in the entity's assets and profits.

Entrepreneurial Capitalism

An economic system where individuals are encouraged to start and grow their own businesses, often leading to innovation and economic growth.

Sole Proprietorship

A form of business ownership where a single individual owns and runs the business, bearing full responsibility for its assets and liabilities.