Trade between two parties is beneficial because:
a. it ensures that the standard of living in the poorer country matches its trading partner eventually.
b. it enables each to consume a bundle of goods that it cannot produced domestically.
c. it has an immediate effect on an economy by increasing its production set.
d. it allows the economy of both trading partners to grow equally.
Question 2
If a firm experiences constant returns to scale throughout:
a. the long-run average-total-cost curve is negatively sloped.
b. the short-run average-total-cost curves are tangential to the long-run average-total-cost curve at a point on their positively sloped portion.
c. the short-run average-total-cost curves are tangential to the long-run average-total-cost curve at their minimum points.
d. the short-run average-total-cost curves are tangential to the long-run average-total-cost curve at a point on their negatively sloped portion.
e. the long-run average-total-cost curve is positively sloped.
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