If a nation has a comparative disadvantage in the production of some commodity,
a. it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.
b. it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if they produced it domestically.
c. it cannot gain from international trade in the commodity.
d. it cannot gain from international trade unless it has an absolute advantage in every other commodity.
Question 2
Which of the following statements is correct?
a. The ideal solution to a pollution problem is to reduce pollution until it is technologically impossible to reduce it any further.
b. The ideal and fair solution to a pollution problem is to impose identical compliance standards on all polluting firms.
c. Charging firms for transferable emissions permits is a more efficient way of dealing with pollution than are compliance standards.
d. A per-unit pollution tax is a more efficient way of dealing with pollution than is a system of transferable emissions permits.
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