Explanation

This question tests knowledge of different levels of economic integration. Let's analyze each option:

A. Free trade area - This involves elimination of trade barriers among member countries, but each country maintains its own trade policies with non-members. This does NOT include free movement of factors of production (labor and capital) or a common trade policy against non-members.

B. Customs union - This includes elimination of trade barriers among members PLUS a common external tariff against non-members. However, it does NOT include free movement of factors of production (labor and capital).

C. Common market - This includes ALL the features mentioned in the question:

1. Free movement of goods and services (like a free trade area)
2. Free movement of factors of production (labor and capital)
3. Common trade policy against non-members (like a customs union)

Key Distinctions:

• Free trade area: Only eliminates internal trade barriers
• Customs union: Free trade area + common external tariff
• Common market: Customs union + free movement of factors of production
• Economic union: Common market + harmonized economic policies
• Complete economic integration: Economic union + unified economic policies

Since the question specifically mentions "free movement of goods, services, and factors of production" AND "common trade policy against non-members," this perfectly describes a common market.

Real-world examples:

• European Union (EU) is an example of a common market
• NAFTA was a free trade area
• MERCOSUR is a customs union