If Prices of a Nation's Exported Products Rise in Comparison

question 91

Multiple Choice

If prices of a nation's exported products rise in comparison with prices paid for imports, that nation experiences a:

• A) rise in its international terms of trade.
• B) decline in its international terms of trade.
• C) reduction in its imports.
• D) reduction in its exports.

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Definitions:

Marginal Costs

The added financial burden of creating one more unit of a product or service.

Average Costs

The total cost of production divided by the quantity produced, often used to evaluate production efficiency.

Fixed Costs

Costs that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance premiums.

Marginal Costs

Marginal costs represent the change in total production cost that arises when the quantity produced is incremented by one unit, essentially the cost of producing one additional unit of a good.