The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
FIGURE 33- 5
-Governments often implement programs designed to encourage research and development. Such programs may change the comparative advantage of that country because
A) they are expected to change the endowments of each country.
B) increases in research and development always lead to an increase in imports.
C) they will raise the costs of production of the trading partners.
D) they are expected to lead to improvements in technology.
E) the opportunity costs of exported products cannot change.
Correct Answer:
Verified
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