Applied to Trade in Two Goods Between Two Countries,the Principle

question 32

Multiple Choice

Applied to trade in two goods between two countries,the principle of comparative advantage does not suggest that

• A) a nation with an absolute disadvantage in producing both goods will have a comparative advantage in producing one of them
• B) the two nations will specialize in the production of different goods
• C) both nations will equally benefit from trade
• D) consumption possibilities will exceed production possibilities after trade
• E) each nation will import the good whose opportunity cost of production is higher at home than abroad

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Definitions:

Direct Exporting

A method of entering international markets by selling products directly to customers in another country.

Domestically Produced Goods

Products that are manufactured or produced within the country's borders, as opposed to being imported from abroad.

Intellectual Property

Legal rights that protect original works, inventions, or the appearance of products from unauthorized use by others.

Retail Venue

A place or channel where retail transactions occur, including physical stores, online marketplaces, or pop-up shops.