Organizing a successful firm in a market economy has become

Organizing a successful firm in a market economy has become over the last century OA. politically impossible OB. less difficult O C. legally impossible O D. more difficult

Solution

Answer : 1) Option number D is correct.

Because over last century the competition in the market becomes higher because many firms exist in the market. Substitute products exist in the market and as a result if price of one good increase then consumers go to substitute goods for purchase. The another one is invisible hand. Government decisions works as an invisible hand in the market which decide the market price level on the basis of economic well-being. As a result a firm to be successful in the market economy is very difficult.

2) Option number C is correct.

Because if a country has lower opportunity cost than others , then the country produce more and export . On the other side, higher opportunity cost country produce less and import. Thus, trade occur within the country or between countries. This is the condition of comparative advantage theory. Hence, trade is based on comparative advantage principle.

3) Option number B is correct.

The full form of NAFTA is North America Free Trade Agreement which was implemented on 1st January in 1994. By this agreement most tariffs are eliminated from the large trade zone which includes United States, Canada and Mexico.