With trade, the production possibilities for two nations lie a. outside their consumption possibilities. b. inside...
With trade, the production possibilities for two nations
lie
a. outside their consumption possibilities.
b. inside their consumption possibilities.
c. at a point equal to the world production possibilities
curve.
d. None of the answers above are correct.
4) Free-trade theory suggests that when trade takes place
a. both nations will be worse off.
b. one nation must gain at the other nation’s expense.
c. both nations are better off.
d. one nation will gain and the other nation will
be neither better nor worse off.
Homework Answers
Answer
a. outside their consumption possibilities.
The trade is made consumption possible above the PPF or the outside
the PPF because both countries will specialize in the lower
opportunity cost theory and produces maximum.
----------
ANswer
c. both nations are better off.
Both nations better of because of the decrease in consumer or
producer surplus because of trade increases producer or consumer
surplus more than that.
?
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With trade, the production possibilities for two nations
lie
a. outside their consumption possibilities.
b. inside...
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