Practice Questions
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Which scenario best illustrates how comparative advantage can lead to mutual benefits in international trade agreements?
When a country focuses on producing a good it can make more cheaply, it saves time and money. Other options are incorrect because Tariffs do not show ...
How does an increase in consumer income typically affect the market demand for luxury goods?
When people earn more, they have extra money to spend on items they want but don't need. Other options are incorrect because Some think extra money is...
Which of the following scenarios best exemplifies how economic interdependence can enhance the benefits of international trade agreements?
When each country focuses on what it produces best, they can exchange goods. Other options are incorrect because The idea that high tariffs protect jo...
In a scenario where two countries, A and B, specialize in the production of different goods due to economic interdependence, how might the imposition of tariffs by Country A affect the overall efficiency and opportunity cost for both countries?
A tariff makes imported goods from B more expensive for A. Other options are incorrect because The idea that tariffs improve efficiency by making B pr...
If a student decides to spend an evening studying for an economics exam instead of working a part-time job, what is the opportunity cost of their decision?
The student is giving up the money they could earn from the part‑time job. Other options are incorrect because Many think the study itself is the cost...
Country X is known for its efficient production of electronics, while Country Y excels in agricultural products. If both countries decide to specialize according to their comparative advantages and engage in trade, which of the following outcomes best reflects the benefits of specialization and trade?
Country X uses its skill in electronics to make more of it, and Country Y uses its skill in farming to make more food. Other options are incorrect bec...
If Country A specializes in the production of wheat and exports it, what is the most likely underlying reason for this specialization?
Country A can grow wheat using fewer resources or less effort than it can produce other goods. Other options are incorrect because This idea mixes cos...
Why might a country choose to specialize in a certain good and trade for others?
Specializing lets a country focus on the products it can make most efficiently. Other options are incorrect because The idea that specialization means...
Which of the following scenarios best illustrates the concept of specialization and trade?
In this scenario, each country chooses to make the product they can produce most efficiently. Other options are incorrect because Both countries try t...
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