Chile Allows Trade with the Rest of the World

question 148

Multiple Choice

Chile allows trade with the rest of the world.We know that Chile has a comparative advantage in producing lemons if we know that

• A) Chile imports lemons.
• B) the world price of lemons is higher than the price of lemons that would prevail in Chile if trade with other countries were not allowed.
• C) consumer surplus in Chile would exceed producer surplus in Chile if trade with other countries were not allowed.
• D) All of the above are correct.

---

Definitions:

City Bonds

Municipal securities issued by cities to fund public projects such as schools, highways, and urban redevelopment.

Domestic Banks

Financial institutions that operate within the legal jurisdiction of a specific country, accepting deposits and making loans.

Rule 10b-5

A regulation promulgated under the Securities Exchange Act of 1934, prohibiting fraud, misrepresentation, and deceit in securities transactions.

Schemes and Devices

Techniques or plans, oftentimes deceptive or fraudulent, used to achieve a specific goal or to evade regulations.