If country A exports good X to country B and country B exports good Y to country A, it is most likely that
A) A has an absolute advantage in the production of good X.
B) B has a comparative advantage in the production of good Y.
C) the opportunity cost of domestic production of good Y for country A is lowered with trade.
D) B is producing less of good Y than in the no-trade case.
B
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The slope of a fairly flat upward-sloping line will be a
a. small positive number. b. large positive number. c. small negative number. d. large negative number.
Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state that
A. neither country has a comparative advantage in the production of any good. B. the two nations should not specialize in the production of goods. C. specialization can lead to a decrease in the production of all goods. D. specialization can lead to an increase in the production of all goods.