Author Question: Most theories of comparative advantage explain trade patterns due to international differences in ... (Read 177 times)

frankwu · **on:** Jun 30, 2018

Most theories of comparative advantage explain trade patterns due to international differences in

A) demand conditions.
B) supply conditions.
C) demand and supply conditions.
D) tariffs.

Question 2

Suppose the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that

A) the United States has no comparative advantage
B) Germany has a comparative advantage in butter.
C) the United States has a comparative advantage in butter.
D) Germany has a comparative advantage in widgets.
E) Germany has lost its comparative advantage.