If a country has a comparative advantage in the production of all goods, it should:
a. specialize in the production of goods with the lowest opportunity cost.
b. specialize in the production of goods with the highest opportunity cost.
c. specialize in the production of goods with the absolute advantage.
d. specialize in the production of goods without the absolute advantage.
e. not specialize at all and produce all the goods itself.
a
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People who call for creating a "level playing field" believe that:
a. a country with relatively low wages is typically a country with an abundance of low-skilled labor. b. trading on the basis of comparative advantage benefits both domestic and foreign firms. c. creating a "level playing field" undermines the basis for specialization and economic efficiency. d. production in accordance with comparative advantage is unfair. e. free trade allocates the scarce resources in an efficient way.
A theory is an untested assertion of alleged fact.
Answer the following statement true (T) or false (F)