Which of the Following Would Not Result from All Countries

question 12

Multiple Choice

Which of the following would not result from all countries specializing according to the principle of comparative advantage?

• A)The size of the economic pie would increase.
• B)Worldwide production of goods and services would increase.
• C)The well-being of citizens in each country would be enhanced.
• D)Each country's production possibilities frontier would shift inward.

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Definitions:

Binding Price Ceiling

A limit imposed by the government on how high a price can be charged for a good or service, which is set below the equilibrium price, causing a shortage.

Tax Revenue

Government income obtained from taxation.

Payroll Tax

Duties levied on employees or the companies that employ them, computed as a percentage of the remuneration the employees are given.

Wages

The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee, especially to manual or unskilled workers.