When Can Two Countries Gain from Trading Two Goods

question 14

Multiple Choice

When can two countries gain from trading two goods?

• A)when the first country can only produce the first good and the second country can only produce the second good
• B)when the first country can produce both goods,but can only produce the second good at great cost,and the second country can produce both goods,but can only produce the first good at great cost
• C)when the first country is better at producing both goods and the second country is worse at producing both goods
• D)Two countries could gain from trading two goods under all of the above conditions.

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Definitions:

Required Rate

The minimum annual percentage return that an investment must yield to be considered worthwhile, often influenced by the risk involved and market conditions.

Expected Growth Rate

The annual rate at which an investment, earnings, or value is expected to grow.

Annual Dividend

Annual dividend is the total amount of dividend payments a shareholder receives from a company in one year.

Zero Growth Stock

A stock in a company which is not expected to experience any growth in dividends or earnings and typically pays a high dividend yield.