According to the HO model, countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other

A system of barter has substantial transactions costs because

A) taxes under such a system are generally a large fraction of the value of output. B) traders must spend considerable time searching for trading partners. C) the uncertainties of trade result in high legal fees being incurred to draw up binding contracts. D) the uncertainties of trade result in high insurance premiums.

The socially optimal amount of pollution is

A) zero. B) greater than zero. C) indeterminant. D) unattainable.