Suppose That After Specializing According to Comparative Advantage, a Country

question 46

Multiple Choice

Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country?
i.It enjoys gains from trade.
ii.It must have an absolute advantage in the production of the good it produces.
iii) It is producing at a point beyond its PPF.

• A)i and iii
• B)i and ii
• C)i only
• D)i, ii, and iii
• E)ii and iii

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