Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country?
i. It enjoys gains from trade.
ii. It must have an absolute advantage in the production of the good it produces.
iii. It is producing at a point beyond its PPF.
A) ii and iii B) i and iii C) i, ii, and iii D) i only E) i and ii
D
Economics
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Figure 4.4 illustrates the supply of tacos. A technological advancement which makes tacos cheaper to produce would most likely cause a movement from
A) point a to point c. B) point c to point a. C) S0 to S2. D) S2 to S0.
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How does equilibrium expenditure come about? What adjusts to achieve equilibrium?
What will be an ideal response?
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