In a Two-Country,two-Commodity Framework,when One Country Has an Absolute Advantage

question 130

Multiple Choice

In a two-country,two-commodity framework,when one country has an absolute advantage in the production of both commodities,_____.

• A)autarky is always preferred to trade
• B)differences in the opportunity cost of production between the two countries ensure that specialization and trade result in mutual gains
• C)the country with the lowest opportunity cost of production is the least competitive in international markets
• D)the countries gain from mutual trade as long as tastes differ across countries
• E)the countries gain from specialization and exchange as long as they are the same size

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Definitions:

Theory Compare

A process of evaluating the similarities and differences between two or more theories to understand their unique contributions and limitations.

Evolutionary Psychology

A theoretical approach that examines mental traits such as memory, perception, and language from the perspective of human evolution and natural selection.

Explanations

Reasonings given to clarify how or why something happens or is done, providing understanding into the cause-and-effect relationships or mechanisms behind events.

Evolutionary Psychology

A theoretical approach in psychology that explains human thoughts and behaviors as adaptations, evolved to solve problems of survival and reproduction.