When Opportunity Costs Are Identical Between Two Countries for All

question 25

Multiple Choice

When opportunity costs are identical between two countries for all goods,

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

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Definitions:

Y-Intercept

The point at which a line crosses the y-axis on a graph.

X-Intercept

The point at which a line or curve on a graph crosses the x-axis, indicating a value of x where the function equals zero.

Slope

The slope refers to the steepness or incline of a line on a graph, representing the rate of change between variables.

Linear Regression Equation

A mathematical equation that describes the linear relationship between two or more variables, typically one dependent and one or more independent variables.