When Opportunity Costs Are Identical Between Two Countries for All

question 47

Multiple Choice

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

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

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Definitions:

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