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.
a
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The total amount of producer surplus in a market is equal to the area above the market supply curve and below the market price
Indicate whether the statement is true or false
Which of the following is a characteristic of a competitive price-taker market?
a. Profit maximizing firms in the market will expand output until price equals average variable cost. b. The market demand curve for the product is a horizontal line. c. There are many firms in the market, each producing a small share of total market output. d. The product produced by each of the firms is differentiated.