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:

Suburban Middle Class

A social class that became prominent in the mid-20th century, characterized by families living in suburban neighborhoods with a moderate to high income.

Subsidies

Financial support provided by the government to decrease the cost of goods and services for producers or consumers.

Mortgages

Loans specifically designed for the purchase of real estate, where the property itself serves as security against the loan until it is fully repaid.

Eisenhower

Refers to Dwight D. Eisenhower, the 34th President of the United States, who served from 1953 to 1961 and led significant domestic and international policies during the Cold War.