The Key to Resolving the Apparent Paradox of International Trade

question 29

Multiple Choice

The key to resolving the apparent paradox of international trade increasing total output yet facing much political opposition is noting that:

• A) economists are mistaken about the increase in output.
• B) only the wealthy benefit from trade.
• C) no one benefits from trade.
• D) everyone does not benefit equally from trade.

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Definitions:

Wage Decrease

A reduction in the hourly, daily, or monthly compensation that workers receive for their labor.

Utility Maximizing

The principle or practice of choosing the combination of goods and services that provides the highest level of satisfaction or utility to an individual.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, holding other factors constant.

Marginal Product

The additional output produced as a result of utilizing one more unit of a particular input, holding all other inputs constant.