Suppose Rice Can Be Produced in Country X at a Lower

question 223

Multiple Choice

Suppose rice can be produced in country X at a lower cost than in country Y, while tuna can be produced in country Y at a lower cost than in country X. International competition will:

• A) destroy the rice market in both countries.
• B) drive X to specialize in rice and Y to specialize in tuna.
• C) drive Y to specialize in rice and X to specialize in tuna.
• D) cause both X and Y to reject international specialization.
• E) result in lower total output of rice and tuna.

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