If Two Countries Agree to Specialize and Trade Based on Comparative

question 3

Multiple Choice

If two countries agree to specialize and trade based on comparative advantage,which of the following is most likely to be TRUE?

• A)Both of the countries will consume outside their respective production possibilities curves.
• B)One of the countries will end up receiving all of the gains from trade.
• C)One of the countries will both consume and produce on its production possibilities curve.
• D)Only one of the countries will produce on and consume outside its production possibilities curve.

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Definitions:

Nourishment

The food or other substances necessary for growth, health, and good condition.

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A genetic disorder affecting the lungs and other organs, characterized by thick, sticky mucus that can block airways.