Consider the following information about the production of two goods, X and Y, in two countries, A and B:
∙ In Country A it takes Xa units of resources to produce one unit of X and Ya units of resources to produce one unit of Y.
∙ In Country B it takes Xb units of resources to produce one unit of X and Yb units of resources to produce one unit of Y.
∙ Assume the amount of resources used to produce the goods in the two countries can be compared unambiguously.
TABLE 32-1
-Refer to Table 32-1. There is no scope for gains from trade due to specialization between the two countries if
A) Xa/Ya) is greater than Xb/Yb) .
B) Xa is equal to Yb.
C) Xa/Ya) is equal to Xb/Yb) .
D) Xa is less than Yb and Ya is less than Yb.
E) Xa is less than Xb.
Correct Answer:
Verified
Q2: Consider the following information about the production
Q4: Trade,whether between individuals or nations,generally promotes
A)self-sufficiency.
B)specialization.
C)lower living
Q7: The existence of "absolute advantage"
A)implies that there
Q9: Consider two countries that can produce rice
Q11: Consider a country that is initially autarkic
Q11: There will be no gains from specialization
Q12: A country that engages in no foreign
Q14: The increases in a nation's output and
Q17: If a country has a comparative advantage
Q19: The existence of any "gains from trade"
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