A Problem Facing the Timber Industry Is the Absence of Any

question 111

Multiple Choice

A problem facing the timber industry is the absence of any effective way to prove that rain forest timber has been legally harvested.In places like Indonesia,as much as 80 percent of timber available for sale is illegally cut.Companies like The Home Depot do not want to sell timber from illegally logged forests even though the demand is great for timber from rain forests.Which of the following conditions required for an exchange to occur is missing when a company tries to sell illegally acquired logs to The Home Depot?

• A) There are more than two parties involved.
• B) Each party has something of value to bring to the exchange.
• C) One party is free to accept the exchange offer.
• D) Each party believes it is appropriate to deal with the other party.
• E) Nobody sees the exchange as producing value.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to higher market prices.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country, often used to protect domestic industries.

Tariff

A tax imposed on imported goods and services to increase their price and reduce competitiveness with domestic products.

Country

A defined geographic area or political unit acknowledged as a sovereign state.