If Two Countries Have Identical Production Possibility Frontiers,then Trade Between

question 56

Multiple Choice

If two countries have identical production possibility frontiers,then trade between them is likely to be beneficial if

• A) their supply curves are identical.
• B) their cost functions are identical.
• C) their demand conditions are identical.
• D) their incomes are identical.
• E) their demand functions differ.

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Definitions:

Rent-seeking

Endeavors aimed at earning income by manipulating the economic environment rather than through trade and production of added value.

Monopoly Power

The ability of a single seller to control the market for a good or service, setting prices and output levels.

Government Licensing

A control mechanism whereby a government authority grants permission to individuals or companies to operate within certain industries or professions.

Price Regulation

Governmental policies or laws set to control or limit the prices charged for goods and services in the market to protect consumers and promote fairness.