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Foundations Of Modern Trade Theoryeconomics-mcqs › foundations-of-modern-trade-theory
Published
1 Jun 2019
Last updated
28 May 2026

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In a self-sufficient economy, where does the production point lie when the community optimizes its living standards?

Multiple choice question for Foundations Of Modern Trade Theory. Select an option, then review the explanation below.

Choose the correct answer

Explanation

When a community in autarky maximizes its standard of living, it operates efficiently, which means production occurs on the production possibility frontier. Points inside the frontier indicate inefficiency, while points beyond it are unattainable with current resources.

Practice related questions from the same subject.

  1. 1.According to G. MecDougall's research, what relationship did he find between labor productivity and export ratios?
  2. 2.Which of the following factors can contribute to dynamic gains from trade?
  3. 3.Under conditions of free trade, when would Canada fail to gain any benefits from trading with Sweden?
  4. 4.In an economy, when a society achieves the highest possible standard of living, where is its production and consumption point located?
  5. 5.Between 1990 and 2000, which pair of countries experienced an improvement in their terms of trade?

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