If Country a Exports Good X to Country B and Country

question 1

Multiple Choice

If country A exports good X to country B and country B exports good Y to country A, it is most likely that

• A) A has an absolute advantage in the production of good X.
• B) B has a comparative advantage in the production of good Y.
• C) the opportunity cost of domestic production of good Y for country A is lowered with trade.
• D) B is producing less of good Y than in the no-trade case.

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Definitions:

Correct Order

The arrangement of objects or actions in a sequence based on a specific rule or set of rules.

Stages

Distinct periods or phases in a process of development or a sequence of events.

Collective Unconscious

A concept in psychology proposed by Carl Jung, referring to the part of the unconscious mind that is derived from ancestral memory and experience and is common to all humankind.

Latent Memory Traces

Subconscious remnants of experiences that have been encoded into long-term memory but are not currently active or retrievable.