Which of the Following Principles Underlies the Gains from Trade

question 42

Multiple Choice

Which of the following principles underlies the gains from trade?

• A)Resources are scarce.
• B)Marginal analysis is used for "how much" decisions.
• C)Resources should be used as efficiently as possible to achieve society's goals.
• D)People usually exploit opportunities to make themselves better off.

---

Definitions:

Total Market

The complete demand for a product or service within an industry, encompassing all consumers and market segments.

Imperfect Competition

A market structure characterized by the imperfect (less than perfect) competition among the participating players, leading to companies having some control over prices.

Purely Competitive

A market structure characterized by many buyers and sellers, where each participant is a price-taker, with goods being homogeneous.

Price-Output Decisions

Determinations made by companies regarding the price levels and quantity of goods or services to produce, based on factors like cost, demand, and competition.