David Ricardo Would Be MOST Likely to Agree with Which

question 165

Multiple Choice

David Ricardo would be MOST likely to agree with which one of the following statements?

• A) High tariffs on grain are needed to protect the living standards of farmers.
• B) Free trade benefits both trading countries.
• C) If you have an absolute advantage in both trousers and beer,you should not trade with other countries.
• D) If you have a comparative advantage in both trousers and beer,you should not trade with other countries.

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Definitions:

Price-Taker Market

A market situation where sellers or buyers have no influence on the price of a product or service, taking the market price as given.

Market Price

The current price at which a good or service can be bought or sold on the open market, determined by the forces of supply and demand.

Total Market

The entire demand for a certain product or service, inclusive of all segments and types of consumers within a market.

Price Searchers

Firms or individuals who actively seek out and compare prices in an effort to find the most favorable market conditions.