Assume That Only Two Countries, a and B, Exist

question 44

Multiple Choice

Assume that only two countries, A and B, exist.

-Refer to the table above. If you are told that Country B is very much richer than Country A, then the correct answer is

• A) country B will export good S.
• B) country A will export good S.
• C) both countries will export good S.
• D) trade will not occur between these two countries.
• E) both countries will import good S.

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Definitions:

Sail-Away Corporation

A term referring to companies that are set up and operated to avoid taxes and regulations, typically by operating in a jurisdiction other than where they conduct business.

Due Care

The effort made by an individual to avoid harm to other people or their property.

Product Liability

The legal responsibility of manufacturers, wholesalers, or retailers for injuries caused by defective or unexpected dangerous products they provide.

Design Defect

A flaw in the planned or intended design of a product that results in an unsafe or ineffective product.