Multiple Choice
In Question #25 above,
A) a post-trade price ratio (terms of trade) of 1 shirt:0.75 machine is a feasible post-trade price ratio.
B) a post-trade price ratio (terms of trade) of 1 machine:0.6 shirt is a feasible post- trade price ratio and it would give all the gains from trade to France.
C) a post-trade price ratio (terms of trade) of 1 machine:0.55 shirt is a feasible post-trade price ratio and both countries would gain from trade at that price ratio.
D) other things equal, if world demand for shirts is much greater than world demand for machines, then the post-trade price ratio (terms of trade) will tend to settle toward or be located at 1 shirt:0.6 machine rather than settle toward or be located at 1 shirt:0.5 machine.
Correct Answer:
Verified
Correct Answer:
Verified
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