Imagine two countries, Zorba and Anduluvia. Zorba is producing everything at a lower resource cost than Anduluvia. If the two countries trade what is the reason?
What will be an ideal response?
Just because Zorba has an absolute advantage in the production of all goods does not mean that it's not beneficial for the two countries to trade. Suppose there are only two goods. Zorba may have a comparative advantage in only one of the two goods, while Anduluvia may have a comparative advantage in the other. So Zorba could be made better off by specializing in the good in which it has the comparative advantage and trading with Anduluvia for the other good.
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a. Most, if not all, the nations in the world. b. several nations, usually trading partners, with a common agenda or geographically linked. c. nations that agree to trade only with nations in their region. d. a region of the world with not only trade issues but also political cohesiveness.
Firms choose to price discriminate
a. To earn higher profits b. To sell goods to consumers who otherwise would not have purchased c. Both a and b d. None of the above