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:

Net Present Value

A calculation that compares the present value of a project’s cash inflows with the present value of its cash outflows, used in capital budgeting to assess profitability.

Payback Period

The length of time required to recoup the initial investment in a project, ignoring the time value of money.

Capital Investment

Funds invested in a business with the aim of furthering its business objectives, such as purchasing assets or funding new growth initiatives.

Fixed Intervals

Regular, predetermined periods of time during which certain activities or operations occur.