Which of the following statements is true ?
A) Specialization and trade along the lines of comparative advantage allows nations to consume more than if they were to produce just for themselves.
B) Free trade theory suggests that when trade takes place any gains made by one nation comes at the expense of another.
C) According to the theory of comparative advantage, a nation should specialize in the production of those goods for which it has an absolute advantage.
D) One country can have the comparative advantage in both goods, but it can only have the absolute advantage in one good as long as the opportunity costs are different.
Correct Answer:
Verified
Q33: If the opportunity cost of producing cheese
Q33: If Country A has an absolute advantage
Q34: Suppose that Spain has a comparative advantage
Q35: If nation A has an absolute advantage
Q36: According to the principle of comparative advantage,
Q38: If India has an absolute advantage in
Q39: Exhibit 15-4 Coffee and tea output (pounds
Q40: Juanita, a lawyer, can type faster than
Q41: A tariff is a tax on _
Q42: Suppose a country with a large domestic
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents