The central reason why there are gains from international trade is because
a. trading allows otherwise unemployed people to have jobs.
b. the rate of interest is not the same in all countries.
c. resources are not equally distributed to all nations.
d. those nations with absolute advantages in producing many goods can produce all of those goods at lower opportunity costs than other countries.
Question 2
The imposition of a per-unit tax on polluting firms will result in the socially efficient level of production only if the tax equals:
a. the marginal social cost plus the marginal private cost.
b. the marginal social cost plus the marginal external cost.
c. the marginal social cost minus the marginal private cost.
d. the average total cost minus the average variable cost.
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