The Law of Comparative Advantage Suggests That

question 255

Multiple Choice

The law of comparative advantage suggests that

• A)mutually beneficial trade can take place whenever the pre-trade relative costs of production differ between nations.
• B)trade is comparatively more beneficial to big countries than small ones.
• C)mutually beneficial trade requires each country to have an absolute advantage in the production of at least one good.
• D)consumption cannot exceed production-possibilities frontiers.
• E)mature capitalism is inherently exploitative of small nations.

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