Indicate whether each of the following statements is true or false True False St
ID: 1138590 • Letter: I
Question
Indicate whether each of the following statements is true or false True False Statement 1. Two countries can gain from specialization and trade as long as they have different opportunity costs in the production of some goods. 2. The gains from specialization and trade are based on absolute advantage. 3. If a certain trade is good for one country, it must be good for the other country 4. Two individuals can benefit from trade even if neither has a comparative advantage in some activity. 5. Workers in importing industries are likely to oppose trade.Explanation / Answer
Hi, as per Chegg guidelines, we can provide the answer only for the first question. I am providing you the answer for all the true/false ques with explanation. Please repost the 2nd question fill in the blanks as an individual question. Thanks.
Answer:
(1) True, because of different opportunity cost, they can identify which country has comparative advantage in a particular good or service.
(2) False, they are based on comparative advantage.
(3) False, not necessarily true.
(4) False, the gains from trade works when the country has a lower opportunity cost in producing a good or service as compared to other country.
(5) True. If the country is importing a good 'x' from abroad at cheaper rate. The workers who produces good 'x' in home country at higher price would be worse off, because consumers will not buy good 'x' from them. They will import it from other countries.