Which of the Following Constitutes the Best Evidence for Globalization

question 188

Multiple Choice

Which of the following constitutes the best evidence for globalization?

• A) Diamonds that are mined in Country X are sold on the diamond market in Country Y and the money is used to fund a rebel group trying to overthrow the government in Country X.
• B) A flood in country X causes factories to shut down temporarily and they cannot deliver computer chips to foreign buyers. Company Y (in another country) has to reduce its output, and it also raises the price of its products.
• C) Farmers in Country X lose most of their wheat crops because of a drought. The price of wheat triples and the government of country X reimburses farmers for some of their losses.
• D) Country X has almost exhausted all of its available natural energy sources. The government has been investing in alternative energy research for many years and has developed an efficient synthetic energy source.
• E) Country X has raised the tax on gasoline and, as a result, more of its citizens are taking public transportation and cutting back on car travel.

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Definitions:

Negative Economic Profits

A situation where a firm's total revenue is less than its total costs, including both explicit and implicit costs.

Corn Market

The global or local marketplace where corn is traded as a commodity between buyers and sellers.

Increasing-Cost Industry

An industry in which expansion through the entry of new firms raises the prices firms in the industry must pay for resources and therefore increases their production costs.

Economic Losses

Losses incurred when a company or economy's total costs exceed its total revenues, indicating a negative profit situation.