When the country of Matu trades with the country of Balor, Matu experiences a gain because of the high costs of its products while Balor experiences a loss because it is trading small amounts of products that cost very little. Which characteristic of the mercantilist theory does this reflect?
A) factor endowments
B) first-mover advantage
C) zero-sum game
D) late-mover advantage
E) comparative advantage

Question

Quizplus · Accepted Answer

The mercantilist theory views trade as a zero-sum game, where one country's gain is another country's loss. This scenario reflects that perspective, as Matu gains at Balor's expense.

When the Country of Matu Trades with the Country of Balor