Question

6. If the relative opportunity costs of producing goods are identical across countries, then there are tary p A. no gains from trade. for t B. gains from trade if trade is based on absolute advantage mand C. gains from trade if trade is based on comparative advantage pply D. gains from trade that depend on the degree of competition between intemational traders. nd fo 7. The text lists three reasons why economists and non-economists see the pros and cons of international trade in different ways. Which of the following is NOT one of those three reasons? A. The gains from international trade are often hard to see while the losses are usually easily identified. B. Non-economists tend to focus on the social and cultural effects of trade, ignoring the economic effects, while economists do the opposite. C. Non-economists tend to think of foreign trade only in terms of manufactured goods. D. Non-cconomists think that countries with low wages will have a comparative advantage in everything oneta e ex xch e exe xcha 8. The text calls the type of comparative advantage that is not casily changed, such as climate A. stable comparative advantage. B. inherent comparative advantage C. equilibrium comparative advantage. D. permanent comparative advantage

Answer 1

6. Option A. Trade occurs when there is difference in comparative advantage

7. Option D

8. Option B. As these are inherent or geographical advantage a nation gets like temperature, rainfall etc