If Japan Does Not Have a Comparative Advantage in Producing

question 158

Multiple Choice

If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy of reducing or eliminating imports of rice into their country would include:

• A)​Japan will be able to consume a combination of rice and other goods' consumption beyond their domestic production possibilities curve.
• B)​the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.
• C)​the real incomes of Japanese rice consumers would rise, but the real incomes of Japanese rice producers would fall.
• D)​the price of rice in Japan will fall.

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Definitions:

Long-Term Investment

An asset that a company intends to hold for more than one year for the purpose of generating revenue.

Common Stock

Equity shares of a corporation that provide voting rights and represent a claim on a portion of the company's profits in the form of dividends.

Net Income

The amount of money left over after all expenses and taxes are subtracted from total revenue.

Acquisition Cost

The total cost incurred to acquire an asset, including the purchase price and all other expenses necessary to bring the asset into its intended use.