If a Country Has the Comparative Advantage in Producing Wooden

question 45

Multiple Choice

If a country has the comparative advantage in producing wooden furniture,then with free trade:

• A)the country will import wooden furniture.
• B)producer surplus in the market for wooden furniture will increase.
• C)consumer surplus in the market for wooden furniture will increase.
• D)the domestic quantity supplied will be less than the domestic quantity demanded.

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Definitions:

Jobs and Income Argument

A perspective that emphasizes the creation of jobs and income generation as primary economic objectives.

Economic Efficiency

The optimal allocation of resources in a manner that maximizes the production and distribution of goods and services.

Embargo

A government order that restricts commerce with a specified country or the exchange of specific goods.

Dumping

In international trade, it's the practice of selling a product in a foreign market at a price that is below the cost to produce it or below the price in the home market.