When There Is No Trade Between Econia and Macroland, the Price

question 188

Multiple Choice

When there is no trade between Econia and Macroland, the price of a hairbrush is $6 in Econia and $8 in Macroland, while the price of a pair of socks is $5 in Econia and $4 in Macroland. If trade opened up between the two countries, which of these would be the terms of trade that might result, assuming that there are no transportation costs?

• A) The price of a hairbrush would be $6 and the price of socks would be $5 in both countries.
• B) The price of a hairbrush would be $7 and the price of socks would be $4.50 in both countries.
• C) The price of a hairbrush would be $8 and the price of socks would be $5 in both countries.
• D) The price of a hairbrush would be $8 and the price of socks would be $4 in both countries.

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Definitions:

Fraud

The intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right, often involving financial transactions.

Employee Training

A program designed to enhance the knowledge and skills of employees, improving their performance and efficiency.

Rationalize

To attempt to justify with logical reasons, even if these are not appropriate or relevant.

Unethical Acts

Actions or behaviors that violate moral or professional principles and standards.