Wages Are Higher in Country X Than in Country Y

question 17

Multiple Choice

Wages are higher in Country X than in Country Y.If the countries decide to trade,then who will benefit?

• A) Neither country can benefit unless one knows the product that is traded.
• B) Both countries can benefit regardless of the products traded.
• C) Only the country that can produce the product more efficiently will benefit.
• D) Only the country that can produce the product at a lower opportunity cost will benefit.
• E) Both countries will benefit,but only if a trade agreement for specific products is made by their respective governments.

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Definitions:

Overconfidence

The condition of being excessively confident or assured in one’s ability, correctness, or reliability, often without sufficient reason.

Framing Effect

A cognitive bias where people react differently to a choice depending on how it is presented, or "framed," especially as a loss or gain.

Belief Perseverance

The psychological phenomenon where individuals maintain their convictions even when confronted with contrary evidence, showcasing the difficulty of changing deeply held beliefs.

Framing Effect

The cognitive bias where people's decisions are influenced by the way information is presented, rather than just the information itself.