Lessening Restrictions on Imports Usually Leads to

question 18

Multiple Choice

Lessening restrictions on imports usually leads to

• A)a country producing at the interior of its production possibilities frontier.
• B)a country consuming even further beyond its production possibilities frontier.
• C)an increase in exports and employment.
• D)a lower per capita level of real consumption.

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Definitions:

Economic Efficiency

A state where resources are allocated in a manner that maximizes the production of goods and services without wasting any resources.

Economies of Scale

Financial advantages gained by firms due to their operational size, where a greater volume of production usually correlates with a lower cost for each output unit.

Per-unit Costs

The cost incurred for producing or acquiring a single unit of a product or service.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than two or more firms due to economies of scale.