Which of the following statements is true?
A) If the opportunity costs differ between two countries, there is no opportunity for mutually advantageous trade.
B) International trade leads countries to specialize in the production of those goods for which they have an absolute, rather than a comparative, advantage.
C) Free international trade can increase the availability of all goods and services in the countries that participate in trade.
D) The potential costs of free trade generally outweigh the benefits.
Ans: C) Free international trade can increase the availability of all goods and services in the countries that participate in trade.
You might also like to view...
When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they can achieve long-run economic profit similar to
A) perfect competition. B) monopoly. C) monopolistic competition. D) non-colluding oligopolies. E) the firms in regulated industries.
In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of
A) shoes. B) bookshelves. C) either shoes or bookshelves. D) neither shoes nor bookshelves.
Since 1930, U.S. government spending as a percent of GDP has
a. increased b. decreased c. stayed the same d. showed no particular trend e. increased by the same percent each year
Figure 3-20
Refer to . If 110 units of the good are being bought and sold, then
a.
the cost to sellers is equal to the value to buyers.
b.
the value to buyers is greater than the cost to sellers.
c.
the cost to sellers is greater than the value to buyers.
d.
producer surplus is greater than consumer surplus.