When the principle of comparative advantage determines trade, then a country will
A) specialize only in that good with the highest opportunity cost.
B) specialize only in goods with the lowest opportunity costs.
C) specialize only in that good where output is less per worker hour than another country.
D) specialize only in that good where production costs are more than average total costs.
Answer: B
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An adverse oil-price shock reduces labor demand. What happens to current employment and the real wage rate?
A) Both employment and the real wage rate would increase. B) Both employment and the real wage rate would decrease. C) Employment would increase and the real wage would decrease. D) Employment would decrease and the real wage would increase.
After the American Revolution concluded, what did the English do?
(a) They withdrew all investments in colonial America. (b) They continued investing in colonial America. (c) They discouraged individuals in other countries from investing in colonial America. (d) They did none of the above.