Catfish farming is a perfectly competitive industry. Catfish farmers suffered tremendous economic losses in the late 2000s. As a result,

Which of the following statements correctly describes international trade in accordance with comparative advantage?

a. Trade is impossible unless there exists a purely competitive market for foreign exchange. b. Trade makes all the citizens of the trading countries better off, which is a clear example of a Pareto improvement. c. Trade may well make some citizens in each trading country worse off. d. Trade requires the judicious application by government of tariffs and quotas in order to discourage production according to comparative disadvantage. e. Trade requires that the economies of the trading partners be of roughly equal size (United States versus Andorra just does not work).

According to the text, Japan lost much of its capital stock during World War II. It subsequently found that its

a. production possibilities curve had shifted to the left because it was unable to regain,even until today, its prewar output levels, having lost so much of its capital resources(Hiroshima and Nagasaki still haven't recovered from the 1945 atomic bomb attacks) b. production possibilities curve, having shifted to the left, quickly recovered with the use of the most up-to-date technology c. economy's productivity suffered irreversibly because the enormous loss of life created a loss of skilled, scientific, and technological knowledge d. research efforts were hampered because victor countries refused to share scientific knowledge with it in retaliation for the war e. production possibilities curve remained unchanged for two decades after the warbecause international trade was reduced