Author Question: Comparative advantage: a. Explains why countries specialize in producing commodities. b. ... (Read 61 times)

folubunmi · **on:** Jul 22, 2018

Comparative advantage:

a. Explains why countries specialize in producing commodities.
b. Explains why trade takes place.
c. Results in increased total output.
d. Results in some producers realizing short-run gains and others losing.
e. All of the above.

Question 2

The principle of comparative advantage:

a. Explains why U.S. agriculture is losing market share.
b. Explains why 3rd world nations have nothing to contribute to world trade.
c. Explains why eliminating barriers to trade, which in effect would pool the world's resources, increases real wages to factors of production.
d. Is the sole determinant of the relative ability of nations to compete with one another.
e. Explains why developing countries should be self sufficient in food production.