If Two Nations Have Straight-Line Production Possibilities Curves

question 277

Multiple Choice

If two nations have straight-line production possibilities curves,

• A) then their trading possibilities curves must lie inside the production possibilities curves.
• B) there will be no basis for mutually advantageous trade.
• C) there will be a basis for mutually advantageous trade whether the slopes are equal or not.
• D) there will be a basis for mutually advantageous trade provided the slopes differ.

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