In the Situation in Question #8 Above, If the Countries

question 7

Multiple Choice

In the situation in Question #8 above, if the countries engage in trade at posttrade prices (terms of trade) of 1 shirt = 0.5 brandy, then

• A) France gets all the gains from trade.
• B) the United States gets all the gains from trade.
• C) neither country gains from trade.
• D) the two countries share equally in the gains from trade.

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