Use the Table Below to Answer the Following Question

question 41

Multiple Choice

Use the table below to answer the following question. The table outlines the production possibilities of Slavia and Italia for food and clothing. The law of comparative advantage suggests that

• A) neither country could gain from trade, even if the costs of transporting the products were zero.
• B) Italia could not gain from trade because it has an absolute advantage in producing both goods.
• C) both countries could gain if Italia traded food for clothing produced in Slavia.
• D) both countries could gain if Slavia traded food for clothing produced in Italia.

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Definitions:

After-tax Return

The profit from an investment after all taxes have been subtracted, indicating the net gain to the investor.

Time Horizons

The length of time over which an investment is expected to be held before it is liquidated, ranging from short-term to long-term periods.

Casualty Insurance

Insurance coverage for loss or liability stemming from a sudden, accidental event.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks, which provide income through dividends and potential for capital gain.