International trade is possible in part through:
A) inefficiently employing resources.
B) restricting the rate of growth of output.
C) generalization in the production of all goods.
D) specialization in the production of goods.
Ans: D) specialization in the production of goods.
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Which of the following is NOT a reason people tolerate tariffs and quotas?
A) Ignorance B) Their personal jobs depend on tariffs and quotas. C) Costs may be hidden and hard to quantify. D) Costs of the policy are spread over a large number of people. E) The marginal expenses to fight the protection outweigh the personal marginal costs of the protection.
It is generally claimed that state trading, or centrally controlled trading will tend to reach a lower economic welfare than would be reached by allowing market forces to determine trade flow directions and terms of trade
Illustrate a counter-example to this proposition.