Which of the following statements is true?
A. Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it
B. Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner
C. Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product
D. Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product
D. Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product
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When the exchange rate fluctuates around a fixed central target, allowing for a moderate amount of fluctuation, while tying the currency to the target central rate, the exchange rate is under a(n):
a. horizontal band. b. crawling peg. c. managed float. d. independent float. e. currency board.
A free-rider problem exists when a good that has the following characteristic?
a. Rivalry in consumption. b. Elastic demand. c. Inelastic demand. d. Nonexcludable.