Large Developed Countries Can Produce More of Practically Everything Than

question 83

Multiple Choice

Large developed countries can produce more of practically everything than can small, less developed countries. Which of the following statements is true?

• A) The large country has no incentive to trade with the smaller country.
• B) It would be impossible for the smaller country to have a comparative advantage in making any products that the larger country wants to buy.
• C) Trade will benefit both countries if each country has a comparative advantage in a traded product.
• D) Trade between the countries is more likely to benefit the small country and harm the larger country.

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Definitions:

Sale-On-Approval

A transaction in which goods are delivered to a buyer for examination with the understanding that the sale is final only if the goods are approved.

Sale-Or-Return

A commercial agreement where goods are provided with the option of return if they fail to be sold.

Formal Ball Gowns

Elegant, floor-length dresses designed for formal social events or balls.

Risk Of Loss

The liability for the potential loss or damage to goods during transportation or storage.