1. Motivation for trade includes all of the following except a. To increase outp
ID: 1120898 • Letter: 1
Question
1. Motivation for trade includes all of the following except a. To increase output due to specialization. b. To be able to import goods that are cheaper than those you can make yourself c. To be able to consume beyond your production possibilities. d. To reduce your consumption possibilities 2. If a country is completely self-reliant in producing goods for its own consumption needs, then a. It is consuming more than it could with trade. b. Its consumption possibilities will equal its production possibilities. c. It is promoting specialization. d. It has the broadest possible mix of consumer goods 3. Costa Rica can produce bananas using fewer inputs than Canada; thus Costa Rica has an absolute advantage in producing bananas. Costa Rica has a comparative advantage in producing bananas. Specialization will not change worldwide consumption possibilities in this case. All of the answers are correct. a. b. c. d. 4. To say that a country has a comparative advantage in the production of wine is to say that a. It can produce wine with fewer resources than any other country can. b. Its opportunity cost of producing wine is higher than another country's. c. Its opportunity cost of producing wine is lower than another country's d. The relative price of wine is higher in that country than in any other.Explanation / Answer
First question is answered below
1.
Correct option: (d)
Reason: No country would want to engage in any kind of trade that would reduce its consumption possibilities.
Trade is incurred so as to increase both production and consumption at the same time making money.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.