Suppose Iceland Goes from Being an Isolated Country to Being

question 54

Multiple Choice

Suppose Iceland goes from being an isolated country to being an importer of coats.As a result,

• A)consumer surplus increases for consumers of coats in Iceland.
• B)producer surplus increases for producers of coats in Iceland.
• C)total surplus remains unchanged in the coat market in Iceland.
• D)it is reasonable to infer that Iceland has a comparative advantage over other countries in coat production.

---

Definitions:

Net Operating Income

The profit a company generates from its operations, excluding taxes and interest.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead costs.

Accounting Records

Documentation and books that capture all financial transactions of a business, company, or individual, providing a basis for financial statements and audits.