Two countries, A and B, that differ in their opportunity costs for the goods each one of them produces have decided to engage in trade. There is A. a unique trading ratio of these two goods that will benefit both countries. B. a unique trading ratio at which Country A will have gains from trade, but Country B will not. C. a range of trading ratios that lies between the opportunity costs of each good for both countries at which both countries will benefit from trade. D. a unique trading ratio at which Country B will have gains from trade, but Country A will not. E. a range of trading ratios that provides gains from trade only to Country A.

The countries get involved in trade with each other as it opens up wider markets for both the…

Answered: Two countries, A and B, that differ in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Because of conflict and instability in Country X, millions of its citizens emigrate to Country Y. Which of the following best explains what will happen to Country Y's production possibilities curve (PPC)? A C E It will move to a point on its PPC at which it produces only consumer goods B It's PPC will not change, but consumption of goods will decrease Its PPC will shift outward over time-- D It will move to a point inside its PPC, indicating slower growth Its PPC will shift inward over time
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You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries?…
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	A. a unique trading ratio of these two goods that will benefit both countries.
	B. a unique trading ratio at which Country A will have gains from trade, but Country B will not.
	C. a range of trading ratios that lies between the opportunity costs of each good for both countries at which both countries will benefit from trade.
	D. a unique trading ratio at which Country B will have gains from trade, but Country A will not.
	E. a range of trading ratios that provides gains from trade only to Country A.