A Rich Country That Opened Its Borders to Trade with a Poor

question 133

Multiple Choice

A rich country that opened its borders to trade with a poor country would cause in the long run

• A) Increased GDP for the rich country but not the poor country.
• B) Increased GDP for the rich country and the poor country.
• C) Increased GDP for the poor country but not the rich country.
• D) None of the choices are correct.

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Definitions:

Equilibrium Level

The state in which market supply and demand balance each other, resulting in stable prices.

Total Costs

The sum of all expenses a firm incurs to produce and sell a product, including both fixed and variable costs.

Short Run

A time period in which at least one input (e.g., plant size, machinery) in the production process is fixed and cannot be changed.

Equilibrium Price

Equilibrium price is the price at which the quantity of goods supplied is equal to the quantity of goods demanded, achieving a state of market balance.