When Imports and Exports for the Same Type of Good

question 42

Multiple Choice

When imports and exports for the same type of good are nearly equal:

• A) the laws of comparative advantage break down.
• B) it is an indication that nearly all the trade is intra-industry.
• C) exports are probably just "finished" in the nation instead of being fully sourced there.
• D) there is a very low level of intra-industry trade.

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Definitions:

Product Cost Concept

The product cost concept encompasses all costs associated with the creation of a product, including materials, labor, and overhead, used for pricing and inventory valuation.

Opportunity Cost

The forfeit of potential benefits from different options when a specific choice is made.

Revenue Forgone

The potential income that is given up when choosing one alternative over another; essentially, it's the opportunity cost of revenue not earned.

Differential Analysis

A decision-making process that looks at the difference in costs and benefits between alternative choices.