Under the Theory of Comparative Advantage, Liberalization of International Trade

question 84

Multiple Choice

Under the theory of comparative advantage, liberalization of international trade will

• A)enhance the welfare of the world's citizens.
• B)create unemployment and displacement of workers permanently.
• C)result in higher prices in the long run as monopolist are able to charge higher prices after eliminating their competitors.
• D)all of the above

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Definitions:

Inputs

Resources such as labor, materials, and capital that are used in the production process to create goods or services.

Average Total Cost

The total cost divided by the quantity produced, calculating the per-unit cost of production.

Variable Cost

Charges that adjust in alignment with the volume of production or output levels.

Total Cost

The sum of fixed and variable costs incurred in the production of goods or services.