Can a Nation Gain from Trade If It Has a Comparative

question 96

Multiple Choice

Can a nation gain from trade if it has a comparative disadvantage in the production of some commodity?

• A)It cannot gain from international trade in the commodity.
• B)It can gain from international trade in that commodity only if it has an absolute advantage in that commodity.
• C)It can still gain from international trade in that commodity by getting it at a lower opportunity cost than if it produced it domestically.
• D)It cannot gain from international trade unless it has an absolute advantage in every other commodity.

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Definitions:

Talcott Parsons

An American sociologist known for his contributions to social action theory, structural functionalism, and for his work on the system theory to understand societal dynamics and functions.

Social Contract

A theory in political philosophy suggesting that people live together in society in accordance with an agreement that establishes moral and political rules of behavior.

Classical Theorist

refers to scholars from earlier periods whose works form the foundations of a discipline, such as Socrates in philosophy or Adam Smith in economics.

Hobbes

Refers to Thomas Hobbes, a 17th-century philosopher known for his social contract theory, which posits that people agree to surrender some freedoms to a ruler or government in exchange for security and social order.