Gains from Trade

question 44

Multiple Choice

Gains from trade

• A) occur when one party to the trade has an absolute advantage in both goods.
• B) result in being able to consume beyond the trading individuals' production possibilities frontiers.
• C) occur when people do not specialize.
• D) occur when opportunity costs are equal.
• E) always benefit one party but not the other party of any trade.

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Definitions:

Peer Interaction

The social engagement and exchanges between individuals of similar age or status.

Emotional Warmth

The feeling of empathy, compassion, and genuine care one person can show to another.

Norm of Reciprocity

A social norm dictating that people should respond to others with the same kind of behavior they have received.

Kin Selection

An evolutionary strategy that favors the reproductive success of an organism's relatives, even at a cost to the organism's own survival and reproduction.