There will be no gains from specialization and trade between two countries if
1) neither country has an absolute advantage in the production of any good;
2) neither country has a comparative advantage in the production of any good;
3) opportunity costs are the same in the two countries.
A) 1 only
B) 2 only
C) 3 only
D) 1 and 2
E) 2 and 3
Correct Answer:
Verified
Q4: Consider the following information about the production
Q4: Trade,whether between individuals or nations,generally promotes
A)self-sufficiency.
B)specialization.
C)lower living
Q6: The concept of "comparative advantage" refers to
Q7: The existence of "absolute advantage"
A)implies that there
Q9: Consider two countries that can produce rice
Q11: Consider a country that is initially autarkic
Q11: There will be no gains from specialization
Q12: A country that engages in no foreign
Q14: The increases in a nation's output and
Q19: The existence of any "gains from trade"
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