According to the two-country general equilibrium (PPF/indifference curves) model, if both countries' production possibilities frontiers are identical, then:
A) both countries must have identical resource endowments and technology.
B) the two countries could still have different comparative advantages if their tastes differ.
C) the two countries could find that international trade is not welfare-increasing.
D) All of the above.
E) None of the above.
Correct Answer:
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A)
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