If Japan Does Not Have a Comparative Advantage in Producing

question 133

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)​making the price of rice in Japan rise.
• B)​making the real incomes of Japanese rice producers rise, but the real incomes of Japanese rice consumers fall.
• C)​making the real incomes of non-Japanese rice exporting countries lower.
• D)​all of the above

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Definitions:

Variable Cost Per Unit

The cost that changes in proportion with the production volume or activity level.

Units Produced

The total number of finished units that have been manufactured during a specific time period.

Fixed Cost Per Unit

The cost that remains constant in total but varies inversely with the level of production or sales volume.

Relevant Range

The range of activity or volume over which the assumptions about variable and fixed cost behaviors hold true, beyond which cost patterns may change.