When Countries Create a Free Trade Area and Increase Market

question 89

Multiple Choice

When countries create a free trade area and increase market size, there will be

• A)less product variety and a less competitive market.
• B)more product variety and a less competitive market.
• C)less product variety, which is another part of the gain from trade.
• D)more product variety, which is another part of the gain from trade.
• E)less product variety but a better quality of products.

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Definitions:

Specialization

The practice of focusing resources on the production of specific goods or services to increase efficiency and productivity.

Brownies

A type of chocolate dessert or sweet snack that is typically baked in a pan and cut into squares or rectangles, known for its dense and rich texture.

Cookies

Small, sweet baked treats often containing ingredients such as chocolate chips, nuts, or raisins.

Comparative Advantage

The aptitude of a country, individual, or corporation to deliver a service or good at a more affordable opportunity cost compared to competitor parties.