The Principle of Comparative Advantage Indicates That Mutually Beneficial International

question 25

Multiple Choice

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

• A) tariffs are eliminated.
• B) transportation costs are almost zero.
• C) relative costs of production differ between nations.
• D) a country can produce more of some product than other nations can.

---

Definitions:

Paperback

A book bound in a flexible paper cover, often less expensive than hardcover editions.

Robinson-Patman Act

A 1936 U.S. law aimed at preventing anticompetitive practices by producers, specifically price discrimination.

Antitrust Laws

Legislation intended to promote competition and prevent monopolies by regulating corporate behavior and ensuring fair competition.

Price Discount

A reduction from the original or listed price of a good or service to encourage purchase.