Under the VER of the 1980s, U.S. Automakers

question 133

Multiple Choice

Under the VER of the 1980s, U.S. automakers:

• A) continued their downward slide.
• B) could not recover because they were also faced with other issues, such as labor unrest, increased oil and steel prices, and higher taxes.
• C) were able to slightly improve quality and greatly raise prices.
• D) were able, with the quota, to ignore world market conditions.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, enabling trade and increased efficiency.

Trade Better Off

The idea that parties involved in voluntary trading are better off as they satisfy each other's needs or wants.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors with the same amount of resources.

Production Possibilities

The various combinations of goods and services that can be produced using all available resources and technology.