Which of the following might lead a nation to engage in international trade?
a. Differences in natural endowments such as climate.
b. Differences in skills of the labor force.
c. Differences in endowments of natural resources.
d. All of the above.
Question 2
A tax on pollution would:
a. increase the quantity of pollution generated by giving firms the right to pollute.
b. result in firms polluting the same amount as before the imposition of a tax.
c. decrease the quantity of pollution generated.
d. have an indeterminate impact on pollution levels.
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