Suppose That After Specializing According to Comparative Advantage,a Country Is

question 222

Multiple Choice

Suppose that after specializing according to comparative advantage,a country is trading with another nation that also specializes according to its comparative advantage.Which of the following statements are true for the first country?
i.It enjoys gains from trade.
ii.It must have an absolute advantage in the production of the good it produces.
iii.It is producing at a point beyond its PPF.

• A) i only
• B) i and ii
• C) i and iii
• D) ii and iii
• E) i, ii, and iii

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Definitions:

Positive Statement

A factual statement that can be tested and validated, describing the world as it is.

General State

A term potentially referring to the overall condition of a system or entity, but is not a standard term in economics or related fields. NO.

Normative Statement

A statement that expresses a value judgment or opinion, reflecting beliefs about what should be rather than what is.

Advanced Industrial Society

A society characterized by high levels of industrialization, technological advancement, and standard of living.