If an economist develops a theory about international trade based on the assumption that there are only two countries and two goods, what is most likely?
A) The theory can be useful only in situations involving two countries and two goods.
B) It is a total waste of time, since the actual world has many countries trading many goods.
C) The theory can be useful in helping economists understand the complex world of international trade involving many countries and many goods.
D) The theory can be useful in the classroom but has no use in the real world.

Question

Quizplus · Accepted Answer

This theory can serve as a simplified model to help understand the basic principles of international trade, which can then be applied or expanded to more complex scenarios involving multiple countries and goods. Simplified models are common in economics for illustrating core concepts.

If an Economist Develops a Theory About International Trade Based