Figure 30-2 -Refer to Figure 30-2. Which of the Following Would Cause

question 221

Multiple Choice

Figure 30-2
-Refer to Figure 30-2. Which of the following would cause the change depicted in the figure above?

• A) Lack of investment in infrastructure causes U.S. productivity to fall relative to Chinese productivity.
• B) Tainted cat food from China causes U.S. consumers to decrease their preferences for Chinese goods relative to U.S. goods.
• C) A new trade agreement with China results in the United States removing all tariffs on clothing imported from China.
• D) An expansionary monetary policy causes an increase in the price level of U.S. goods relative to Chinese goods.

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Definitions:

Marginal Product Data

Information that shows the additional output generated by adding one more unit of a factor of production, holding all else constant.

Purely Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and no barriers to entry or exit, which leads to competitive pricing.

Maximize Profits

The goal of firms to achieve the highest possible profit by adjusting production and pricing strategies.

Marginal Product Data

Information related to the additional output generated by employing one more unit of a particular input.