Which of the following is true?
i.Comparative advantage drives international trade.
ii.Compared to a no-trade situation,in a market with imports,producer surplus is larger.
iii.Tariffs lower the domestic price of imported goods.
A) Only i
B) Only ii
C) Only iii
D) i and ii
E) i and iii

Question

Quizplus · Accepted Answer

Comparative advantage is a key driver of international trade as it allows countries to specialize in producing goods where they have a lower opportunity cost. In a market with imports, producer surplus is typically smaller, not larger, compared to a no-trade situation. Tariffs generally increase the domestic price of imported goods, not lower it.

Which of the Following Is True