Deck 2: Choice in a World of Scarcity

Question 1

Which of the following is TRUE regarding trade?
I) Trade creates value by moving goods from people that valuethem less to people that value them more
II)Trade makes everyone better off
III) The only potential losses from trade come when the sellervalues the good more than the buyer.

A)I only
B)I and II only
C)I and III only
D)I, II, and III

Answer 1

B

Question 2

Which of the following is least likely a consequence of thedivision of knowledge?

A)The development of the computer tablet.
B)A totally self-sufficient family farm.
C)A new delivery method for cancer-fighting drugs.
D)The provision of a new bike path in your community.

Answer 2

B

Question 3

Which of the following is NOT a commonly recognized benefitof trade?

A)Trade makes people better off when preferences differ.
B)Trade creates the need for institutions such as the World Trade Organization.
C)Trade increases productivity through specialization and the division of knowledge.
D)Trade increases productivity through comparative advantage.

Answer 3

B

Question 4

Facilitators of trade (such as Pierre Omidyar, the developer ofeBay):

A)may become very rich since they are creating value for many individuals.
B)find it very hard to profit from their services since they are not directly involved in the trades.
C)typically only profit from their services if they are able to obtain government patent rights.
D)are usually seen as taking advantage of consumers.

Question 5

The benefits of trade include:
I) higher output due to specialization
II)higher output due to comparative advantage
III) increased welfare when preferences differ.

A)I and II only
B)II and III only
C)I and III only
D)I, II, and III

Question 6

Mark values his drum set at $800 and Ella values her guitar at$1,000. Suppose that Mark trades his drum set for Ella's guitar.

A)This trade makes Ella worse off by $200.
B)This trade makes Mark better off by $200.
C)Mark must value Ella's guitar for at least $1,000, and Ella must value Mark's drum set for at least $800.
D)This trade creates value by moving the guitar and drum set to people who value them more.

Question 7

Division of knowledge, as discussed in the text, increaseseconomic prosperity because:
I) Each person can develop extensive knowledge about a singleactivity
II)The human brain's capacity to know everything about allproductive activities is limited
III) Specialized knowledge increases productivity, whichincreases total output.

A)I and II only
B)I and III only
C)II and III only
D)I, II, and III

Question 8

If each of us had to grow our own food:

A)civilization as we know it would collapse and billions of people would have much less food to eat.(True Answer
)Correct
B)we would have more time for other pursuits.
C)people would be richer since they would no longer have to spend money on groceries.
D)the total amount of knowledge in society would increase since everyone would have to learn about farming.

Question 9

Which of the following is NOT an outcome of trade?

A)People with different preferences are made better off.
B)Specialization and increased productivity develop.
C)A division of knowledge among trading partners develops.
D)People in poor countries are made worse off.(True Answer )Correct

Question 10

Which of the following statements is incorrect?

A)Trade makes people better off when preferences differ.
B)Trade increases productivity through specialization and the division of knowledge.
C)Non-fraudulent voluntary trade produces both winners and losers.
D)Trade increases productivity through comparative advantage.

Question 11

As trade becomes more widespread, specialization ______,which in turn ______ productivity.

A)decreases; decreases
B)increases; increases
C)decreases; increases
D)increases; decreases

Question 12

Jim has an old (working) television that he would like to get ridof now that he has purchased a new high-definition, flat-screentelevision. The old television is no longer worth anything to himnow that he has his new flat-screen TV. Veronica on the otherhand has an even older television that has just broken down.She would pay up to $50 for any working TV. Which of thefollowing statements is NOT true?

A)If Jim trades Veronica his old television for $50, total value in society increases by $50.
B)If Jim trades Veronica his old television for $50, both are better off but total value in society does not increase.(True
Answer )Correct
C)If a middleman facilitates the $50 trade between Jim and Veronica, but takes a $10 finders' fee, Jim and Veronica will
Still both be better off.
D)If Jim and Veronica do not trade, both are worse off than if they did trade.

Question 13

Which of the following statements is TRUE?
I) Trade allows people to specialize in their area of expertise,increasing society's output of goods and services
II)Specialization and the division of knowledge decreased withthe fall of the Berlin Wall and opening of China's economy tothe world
III) Society's knowledge is limited if everybody produces thesame thing.

A)I only
B)II and III only
C)I and III only
D)II only

Question 14

Which statement best describes why people choose tospecialize?

A)Training is too expensive to specialize in multiple occupations.
B)Trade creates value.
C)Specialization increases productivity.
D)Specialization and trade allow them to consume more than they could produce individually.

Question 15

Which of the following is NOT a reason trade increases wealth?

A)to take advantage of differences in productivity
B)to take advantage of differences in preferences
C)to take advantage of differences in knowledge
D)to take advantage of differences in security (True Answer )Correct

Question 16

Which of the following is NOT true of trade?

A)Trade makes people better off when preferences differ.
B)Trade increases productivity through specialization and the division of knowledge.
C)Trade makes rich people richer and poor people poorer.
D)Trade increases productivity through comparative advantage.

Question 17

If instead of specialized doctors (neurologists, cardiologists,gastroenterologists, etc.) we had doctors who each knew thesame things about all aspects of medicine it would be:

A)better because we could just go to one doctor who could handle all our needs.
B)better because total medical knowledge in society would increase.
C)worse because the human brain is unlimited.
D)worse because total medical knowledge in society would decrease.

Question 18

eBay creates value by:

A)helping sellers trick buyers into purchasing broken items.
B)moving goods like broken laser pointers from people who don't want them to people who do.
C)helping people with the same preferences find each other.
D)moving toys from children who want them to children who don't.

Question 19

Which of the following statements is true?
I) Compared to a modern economy, the division of knowledgewas greater in a primitive economy because every family grewits own food, made their own clothing, and constructed theirown shelter
II)Nobody understands the entire process of producing eventhe simplest of products in a modern economy, like a leadpencil
III) The collapse of communism and the opening of the Chineseeconomy to the rest of the world have increased the division ofknowledge, leading to increased world output.

A)I only
B)III only
C)II and III only
D)I, II, and III

Question 20

Trade creates value because:

A)people get what they want.
B)raw materials are transformed into finished products.
C)people exchange things they do not want for things they do.
D)idle resources are put to use.

Question 21

Owen Wilson is an actor who has acted in many action comedyfilms. In contrast, Tom Cruise has acted in many serious actionfilms. How might the theory of specialization be applied tothem?

A)Owen Wilson has fully specialized in action comedy movies while Tom Cruise has fully specialized in serious action
Movies.
B)Due to filmography protectionism, Owen Wilson is unable to secure serious action roles, and Tom Cruise is unable to secure
Action comedy roles.
C)Casting directors see Owen Wilson as relatively better at action comedy roles and Tom Cruise as relatively better at
Serious action roles and cast them accordingly.(True Answer
)Correct
D)All of these statements are correct.

Question 22

Absolute advantage derives from which of the following?

A)the lowest cost production
B)the most suitable climate
C)the least expensive labor force
D)the best educated labor force

Question 23

Which of the scenarios below best displays how internationaltrade allows for specialization?

A)You are better at mowing lawns than your neighbor who is better at gardening.
B)Truck drivers stay awake on long routes by drinking Colombian coffee.
C)The United States and Canada can both produce lumber, but the U.S.buys lumber from Canada because it has a greater
Yield per acre.
D)Cuba does not have a comparative advantage in producing antibiotics, but due to economic sanctions, relies on its own
Supply of medicines.

Question 24

Knowledge increases ____________ and specialization__________ total output.

A)education; increases
B)productivity; increases
C)perception; increases
D)economies of scale; decreases

Question 25

Jesse is good at math and excellent at making friends andAddae is equally good at both. Mathematically and sociallychallenged Jordan wants to hire tutors to help in each area.Who should tutor Jordan in which area to maximize Jordan'scollege experience?

A)Jesse and Addae should tutor Jordan in both math and social skills.
B)Jesse should teach math and Addae should teach how to make friends.
C)Jesse and Addae should both teach how to make friends.
D)Jesse should teach how to make friends and Addae should teach math.

Question 26

Utilizing comparative advantage can best be exemplified as:

A)your lawyer word-processing her own legal briefs.
B)the CEO of Microsoft programming his own computer.
C)the president of your university teaching a class again.
D)a world-renowned chef hiring someone to cook meals for his family.

Question 27

A country has an absolute advantage in production if:

A)it can produce the same good using fewer inputs than another country.
B)it can produce a good using fewer inputs than it takes another country to produce a different good.
C)other countries can produce the same good using fewer inputs.
D)it has the lowest opportunity cost of producing a good.

Question 28

Specialization and trade:

A)increase the costs of production because of decreased output.
B)decrease the per-unit costs of production because of economies of scale associated with large-scale
Production.
C)create diseconomies of scale, raising the per-unit costs of production.
D)only work within countries, not across countries.

Question 29

Which of the following situations would lead to morestarvation?

A)a world where everyone grows his or her own food and there is no trade
B)a world with trade and lots of specialization
C)a world with immense division of knowledge
D)a world where only some people specialize in food and everyone else produces something else

Question 30

The ability of one producer to produce one good or serviceusing fewer inputs than another producer is:

A)comparative advantage.
B)absolute advantage.
C)opportunity cost.
D)competition.

Question 31

Why does specialization become more profitable on a largerscale?
I) Large firms are more profitable than small firms
II)Cost efficiencies become possible when the production scaleis significantly large relative to the cost of the machines beingused
III) Large-scale production justifies the acquisition of moreknowledge on a specific activity.

A)I and II only
B)I, II, and III
C)I and III only
D)II and III only

Question 32

The benefits of economies of scale and increased competition toan economy include:
I) lower unit costs
II)lower consumer prices
III) lower output levels.

A)I and II only
B)II and III only
C)I and III only
D)I, II, and III

Question 33

The main reason why specialization can raise productivity isthat:

A)knowledge in human brains is limited.(True Answer )Correct
B)some persons have more knowledge than others.
C)it is always good to know less than more.
D)it is impossible to learn anything well.

Question 34

Many universities employ graduate students to teachintroductory undergraduate courses, even though fullprofessors at these universities have more experience and couldpotentially teach these courses better. Which of the followingbest explains why universities choose to utilize graduatestudents instead of full professors to teach their introductorycourses?

A)Graduate students are cheaper.
B)The opportunity cost of teaching an introductory course is higher for full professors than for graduate students.(True
Answer )Correct
C)The opportunity cost of teaching an introductory course is higher for graduate students than for full professors.
D)Introductory classes are the best place for graduate students to build their teaching skills.

Question 35

Which of the following best explains the term specializationwith respect to trade?

A)Specialization occurs when a people concentrate their productive resources on the goods and services they can
Produce most efficiently.
B)Specialization occurs when one person can produce more of a particular good than another person.
C)Specialization refers to the absolute advantage that a person enjoys in the production of goods and services.
D)Specialization refers to the ability of a person to produce more of a good than his or her trading partners.

Question 36

Who wrote, "It is the maxim of every prudent master of afamily never to attempt to make at home what it will cost himmore to make than to buy"?

A)Richard Nixon
B)Dr.Spock
C)Adam Smith
D)David Ricardo

Question 37

According to the textbook, the reason why Martha Stewart doesnot do her own ironing is that:

A)she has never learned how to iron.
B)running her business enterprises just do not leave her enough time.
C)she does not have any real interest in ironing.
D)it costs her more to do her own ironing than to pay someone to iron.

Question 38

To benefit from trade, a person should:

A)specialize in an activity for which she has an absolute advantage.
B)specialize in an activity for which she has a comparative advantage.
C)do everything she possibly can.
D)do nothing at all.

Question 39

The United States and the European Union are groups of semi-independent states that have come together under an agreementwhereby resources can travel freely across borders and acommon currency is in use. Which of the following statementsbest explains how this allows for the achievement of economiesof scale?

A)Each state or country can now target larger markets and can thus earn more export revenue.
B)States and countries no longer have to worry about borders impeding trade.
C)Each state or country can adopt large-scale production techniques that allow lower per unit costs of production.(True
Answer )Correct
D)The removal of trade borders and a common currency enhances trade between member states.

Question 40

Why is specialization so advantageous to trade?
I) Through specialization, people and firms can achieveeconomies of scale
II)Through specialization, people and firms can use specializedmachinery and techniques
III) Trade exists only between people and firms that havecomplete specialization in the goods they are best at producing.

A)I only
B)I, II, and III
C)I and III only
D)I and II only

Question 41

(Figure: PPF Goods X & Y) Refer to the figure. Which of thepoints representing various consumption possibilities for thecountry portrayed above is only attainable through foreigntrade?

A)Point A
B)Point B
C)Point C

Question 42

(Figure: PPF Nickel & Textiles) Refer to the figure. What is themaximum amount of nickel China can produce?

A)10 tons
B)8 tons
C)6 tons
D)4 tons

Question 43

(Figure: PPF Goods X & Y) Refer to the figure. Point Arepresents an allocation of resources that is:

A)efficient.
B)inefficient.
C)impossible.
D)the result of trade.

Question 44

Comparative advantage is determined by which of thefollowing?

A)efficiency
B)bargaining power
C)opportunity cost
D)productivity

Question 45

The theory of comparative advantage is:

A)rarely relevant for identifying whether gains from trade can be obtained.
B)always relevant for identifying whether gains from trade can be obtained.
C)not true for nations, though it may be true for individuals.
D)true for nations, but is not true for business or individuals.

Question 46

A producer has a comparative advantage over other producersif his production of the good involves:

A)more inputs.
B)fewer inputs.
C)a higher opportunity cost.
D)a lower opportunity cost.

Question 47

Which of the following statements shows how absoluteadvantage can be distinguished from comparative advantage?
I) Absolute advantage refers to the ability to produce a goodusing fewer inputs, while comparative advantage is based onthe monthly amount
II)Absolute advantage is based on the yearly productionamount that a country can produce, while comparativeadvantage is based on the monthly production amount
III) Absolute advantage refers to the ability to produce a largeramount of goods with the same number of inputs, whereascomparative advantage refers to the ability to have the lowestopportunity cost of production.

A)I and III only
B)II and III only
C)I, II, and III
D)III only

Question 48

Suppose a famous baseball player, Alex Rodriguez, hires a highschool student to paint his house. Which of the following is mostlikely TRUE?

A)The opportunity cost of painting a house is higher for Alex Rodriguez than for the high school student.(True Answer
)Correct
B)The opportunity cost of painting a house is lower for Alex Rodriguez than for the high school student.
C)The opportunity cost of painting a house is the same for Alex Rodriguez as for the high school student.
D)The opportunity cost of painting a house is zero for Alex Rodriguez and is negative for the high school
Student.

Question 49

According to the theory of comparative advantage:

A)every country can produce some good with a lower opportunity cost.
B)every country should produce goods that involve high opportunity costs.
C)some countries have a comparative advantage in producing every good.
D)some countries should import every good from other countries.

Question 50

The production possibility frontier shows:

A)how society can produce more of one good without giving up the production of another good.
B)what people can consume given different combinations of goods produced.
C)the combinations of output that an economy can produce given its productivity and inputs.
D)the types of goods and services that society should produce to satisfy social interest.

Question 51

Which of the following is NOT true regarding the productionpossibilities frontier (PPF)?

A)The PPF shows the combination of goods that a country can produce given its current productivity and supply of
Resources.
B)The PPF illustrates the trade-offs that exist in the production of goods.
C)The PPF shows that gains from trade are maximized when countries produce those goods for which they have the absolute
Advantage in production.
D)The PPF illustrates the fundamental ideas of scarcity and opportunity cost.

Question 52

The real cost of producing a good is:

A)the dollar cost of inputs used to make the item.
B)the opportunity cost of producing the good.(True Answer )Correct
C)the resources that were used to make the good.
D)the dollar amount it costs to sell the good.

Question 53

According to the theory of comparative advantage, a countryshould specialize in producing a good that involves:

A)more inputs than those in other countries.
B)fewer inputs than those in other countries.
C)a higher opportunity cost than that of other countries.
D)a lower opportunity cost than that of other countries.(True Answer )Correct

Question 54

(Table: iPhone and iPod Production) According to the table oniPhone and iPod Production, which of the following is TRUE?

A)Canada has an absolute advantage in producing both iPhones and iPods.
B)The United States has an absolute advantage in producing both iPhones and iPods.
C)Canada has an absolute advantage in producing iPhones, and the United States has an absolute advantage in producing
IPods.
D)The United States has an absolute advantage in producing iPhones, and Canada has an absolute advantage in producing
IPods.

Question 55

A fundamental idea behind the production possibilities frontieris:

A)the idea of absolute advantage.
B)the presence of trade-offs in production.(True Answer )Correct
C)that economic growth is unlimited.
D)that incentives matter.

Question 56

(Figure: PPF Nickel & Textiles) Refer to the figure. How manytons of textiles does Australia give up to produce one ton ofnickel?

A)1/3
B)1/2
C)2
D)3

Question 57

(Table: iPhone and iPod Production) According to the table oniPhone and iPod Production, the opportunity cost of producingone iPhone is:

A)4/3 of one iPod for Canada, and two iPods for the United States.
B)two iPods for Canada, and four iPods for the United States.
C)3/4 of one iPod for Canada, and one iPod for the United States.
D)one iPod for Canada, and 3/4 of one iPod for the United States.

Question 58

On a production possibilities frontier a trade-off can beillustrated as:

A)an outward shift.
B)an inward shift.
C)a movement from a point inside the frontier to one on the frontier.
D)a movement along the frontier itself.

Question 59

Suppose France can produce four phones or three computerswith one unit of labor, and Sweden can produce one phone ortwo computers with one unit of labor. If France can trade onlywith Sweden, then the theory of comparative advantagesuggests that:

A)France should specialize in producing phones and import computers from Sweden.
B)France should specialize in producing computers and import phones from Sweden.
C)France should produce both phones and computers, and import nothing from Sweden.
D)France should import both phones and computers from Sweden.

Question 60

The slope of the production possibilities frontier at a pointindicates ________.

A)the preferences of a country
B)a country's total gains from trade
C)a country's opportunity cost of production (True Answer )Correct
D)a country's trade balance

Question 61

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, the opportunity cost of 1 pound of pasta for Belgiumis:

A)5 pounds of linen.
B)20 pounds of linen.
C)1/4 pound of linen.
D)4 pounds of linen.

Question 62

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, the opportunity cost of 1 pound of linen for Italy is:

A)10 pounds of pasta.
B)1/4 pound of pasta
C)4 pounds of pasta
D)2 1/2 pounds of pasta

Question 63

(Table: Production Possibilities for Kenya and Sri Lanka)According to the table on Production Possibilities for Kenyaand Sri Lanka, Kenya should produce ________ and Sri Lankashould produce __________.

A)beans; tea
B)tea; beans
C)both goods; neither good
D)neither good; both goods

Question 64

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, Italy has comparative advantage in:

A)both goods, while Belgium has comparative advantage in neither good.
B)linen, while Belgium has comparative advantage in pasta.
C)pasta, while Belgium has comparative advantage in linen.
D)neither good, while Belgium has comparative advantage in both goods.

Question 65

Traders should specialize in the good in which:

A)they have the lowest opportunity cost.
B)they have an absolute advantage.
C)their trading partner has the lowest opportunity cost.
D)they do not have an absolute advantage.

Question 66

(Figure: PPF Mexico & U.S.) Use the figure in which bothMexico and the United States each have 24 units of labor. Theopportunity costs of producing one shirt are:

A)one computer for Mexico and 1/6 of a computer for the United States.
B)1/6 of a computer for Mexico and one computer for United States.
C)one computer for both Mexico and the United States.
D)1/6 of computer for both Mexico and the United States.

Question 67

(Figure: PPF Mexico & U.S.) Use the above figure in whichboth Mexico and the United States each have 24 units of labor.Mexico has a comparative advantage in ______ and the UnitedStates has a comparative advantage in ______.

A)computers; shirts
B)shirts; computers
C)computers; computers
D)shirts; shirts

Question 68

(Table: Production Possibilities for the United States and Mexico)According to the table on Production Possibilities for the United Statesand Mexico, Mexico's opportunity cost of producing each ton of potatoesis ______, while the United States' opportunity cost of producing each tonof potatoes is ______.

A)0.125 tons of potatoes; 0.2 tons of potatoes
B)eight tons of corn; 0.2 tons of potatoes
C)eight tons of corn; five tons of corn
D)five tons of corn; 0.2 tons of corn

Question 69

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, the opportunity cost of 1 pound of linen for Belgiumis:

A)5 pounds of pasta.
B)4 pounds of pasta.
C)1/4 pound of pasta.
D)20 pound of pasta.

Question 70

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, the opportunity cost of 1 pound of pasta for Italy is:

A)2/5 pound of linen.
B)4 pounds of linen.
C)1/4 pound of linen.
D)2 hours of labor.

Question 71

Anita is a wonderful baker and can bake 10 cakes in a day, butthen has no time left to make cookies. If she bakes only cookies,she can make 200 cookies in a day. John can make equallydelicious cakes and cookies but can only make seven cakes or 100 cookies in a day. Based on this information, which of thefollowing statements is true?

A)Anita should split her time between cakes and cookies.John should bake cakes.
B)Anita should bake cakes and John should bake cookies.
C)Anita and John should split their time equally between cakes and cookies.
D)Anita should bake cookies and John should bake cakes.

Question 72

Reference: Ref 2-6(Table: Production Possibilities for Kenya and Sri Lanka)According to the table on Production Possibilities for Kenyaand Sri Lanka, Kenya's opportunity cost of producing beans is________ while Sri Lanka's opportunity cost of producingbeans is _________.

A)0.5 teas; 0.33 teas
B)two teas; 0.33 teas
C)200 teas; 450 teas
D)two teas; three teas

Question 73

Suppose the United States is more productive than China atproducing both T-shirts and cell phones. The theory ofcomparative advantage suggests that consumption in bothcountries will:

A)increase if the United States produces both goods.
B)increase if each country produces the good for which it has the lowest opportunity cost.
C)not change if China produces either T-shirts or cell phones.
D)remain the same since nothing can be done to increase production in the two countries.

Question 74

(Table: Production Possibilities for the United States and Mexico)According to the table on Production Possibilities for the United Statesand Mexico, the United States has an absolute advantage in ________ anda comparative advantage in _________.

A)both goods; corn
B)both goods; potatoes
C)potatoes; corn
D)nothing; potatoes

Question 75

Anita is a wonderful baker and can bake 10 cakes in a day, butthen has no time left to make cookies. If she bakes only cookies,she can make 200 cookies in a day. John can make equallydelicious cakes and cookies but can only make seven cakes or 100 cookies in a day. Based on this information, which of thefollowing statements is true?

A)Anita has the comparative advantage in the production of cakes.
B)John has the comparative advantage in the production of cakes.
C)John has the absolute advantage in the production of cookies.
D)Anita has the comparative advantage in the production of both cakes and cookies.

Question 76

The production possibilities frontier shows:

A)the combinations of outputs a country can produce given its resources and productivity.
B)the combinations of inputs that a country has given its outputs and productivity.
C)the combinations of outputs and resources that a country possesses given its productivity.
D)the maximum level of a country's productivity given its resources and outputs.

Question 77

The opportunity cost of producing a particular good refers to:

A)how much of something else must be given up to produce one additional unit of the good.
B)how much of a good can be produced with the existing technology and resources.
C)the total cost of production, including wages, for all units of the good.
D)the marginal cost of production in order to produce one additional unit of the good.

Question 78

(Table: Production Possibilities for the United States and Mexico)According to the table on Production Possibilities for the United Statesand Mexico, Mexico has an absolute advantage in ________ and acomparative advantage in _________.

A)neither good; corn
B)corn; potatoes
C)potatoes; corn
D)neither good; potatoes

Question 79

(Table: Production Possibilities for the United States and Mexico) Usingthe table on Production Possibilities for the United States and Mexico,assume each country specializes in the good for which it has a comparativeadvantage. Which of the following answers identifies a trade price thatboth countries would find acceptable?
(Units are in tons.)

A)0.2 potato for one corn < Trade price < five corns for one potato
B)0.125 potato for one corn, < Trade price < eight potatoes for one corn
C)five corns for one potato < Trade price < eight corns for one potato
D)0.125 potato for one corn, < Trade price < five potatoes for one corn

Question 80

(Table: Production Possibilities for Italy and Belgium)According to the table on Production Possibilities for Italy andBelgium, Italy and Belgium both could benefit if Italy were tospecialize in:

A)neither good, and Belgium were to specialize in both goods.
B)both goods, and Belgium were to specialize in neither good.
C)pasta, and Belgium were to specialize in linen.(True Answer )Correct
D)linen, and Belgium were to specialize in pasta.