If Good a Costs $10 Per Unit in Country a and $12

question 17

Multiple Choice

If good A costs $10 per unit in country A and $12 per unit in country B, and if transport costs between A and B for the good are $3 per unit, an economist would say that

• A) the good will be exported from A to B.
• B) the good will be exported from B to A.
• C) intra-industry trade will occur in the good.
• D) the good will be a "nontraded good."

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