If Two Nations Have Straight-Line Production Possibilities Curves

question 277

Multiple Choice

If two nations have straight-line production possibilities curves,

• A) then their trading possibilities curves must lie inside the production possibilities curves.
• B) there will be no basis for mutually advantageous trade.
• C) there will be a basis for mutually advantageous trade whether the slopes are equal or not.
• D) there will be a basis for mutually advantageous trade provided the slopes differ.

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Definitions:

Leading Exporter

A country or company that is one of the foremost suppliers of goods or services to markets outside its own borders.

Manufactured Goods

Items that have been processed or transformed from raw materials into finished products through manufacturing methods.

World's Leading

A descriptor for entities or individuals that are recognized as the most successful, innovative, or influential in their respective fields or industries.

Uniform Commercial Laws

A set of laws that standardize and regulate sales and commercial transactions across different jurisdictions to facilitate easier and more predictable commerce.