When Can Two Countries Gain from Trading Two Goods

question 14

Multiple Choice

When can two countries gain from trading two goods?

• A)when the first country can only produce the first good and the second country can only produce the second good
• B)when the first country can produce both goods,but can only produce the second good at great cost,and the second country can produce both goods,but can only produce the first good at great cost
• C)when the first country is better at producing both goods and the second country is worse at producing both goods
• D)Two countries could gain from trading two goods under all of the above conditions.

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Definitions:

Sale of Goods

A transaction between two parties where the seller transfers ownership of tangible personal property to a buyer for monetary compensation.

Assignee

An individual or entity to whom rights or interests have been transferred through a legal assignment.

Right to Buy

A legal entitlement or option allowing a person to purchase property or stock under specific conditions.

English Rule

A legal principle stating that the losing party in a lawsuit must pay the legal costs of the winning party.