Consider the Possibility of Trade Between Countries

question 31

Multiple Choice

Consider the possibility of trade between countries.When opportunity costs are identical between two countries for all goods,

• A)there can be no gains from trade unless there are economies of scale in some of the products.
• B)international trade will be advantageous only to the country that has an absolute advantage in the production of some commodity.
• C)there will be gains from trade for both countries if one country has an absolute advantage in the production of some commodity.
• D)absolute advantages will determine the gains from trade.
• E)there will be absolute gains from trade but no comparative gains from trade.

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Definitions:

Assignment

The transition of rights, possessions, or obligations between parties.

Pro Rata

A portion or share of something that is distributed or allocated in equal proportion to the whole.

Discharged

Refers to the release or termination of a legal duty, obligation, or debt.

Discharge

The completion, termination, or fulfillment of a legal obligation or duty, such as the discharge of a debt or the formal dismissal of an employee.