If the production possibilities curves of two countries have the same slope,
A. neither has a comparative advantage, and there are no gains from trade.
B. although there is no comparative advantage, there are potential gains if there are differences in absolute advantage.
C. neither has an absolute advantage, and there cannot be gains from trade.
D. both have an absolute advantage and can gain from trade.
Answer: A
You might also like to view...
If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on
A) the household price index. B) the GDP deflator. C) the producer price index. D) the consumer price index.
Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . What is her expected loss?
a. $3000 b. $10,000 c. $30,000 d. $100,000