Multiple Choice
In the neoclassical (or modern) theory, two countries with identical production-possibilities frontiers (PPFs)
A) can gain from trade with each other if demand conditions (tastes) differ in the two Countries and the identical PPFs demonstrate increasing opportunity costs.
B) can gain from trade with each other if demand conditions (tastes) differ in the two Countries and the identical PPFs demonstrate constant opportunity costs.
C) can gain from trade with each other even if demand conditions (tastes) are identical in The two countries as long as the identical PPFs demonstrate constant opportunity Costs.
D) cannot gain from trade with each other under any circumstances.
Correct Answer:

Verified
Correct Answer:
Verified
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