Fill-in-the-blank
1. Fill in the blanks to make the following statements correct.
a. The “gains from trade” refers to the increased
attributable to specialization and trade.
b. Suppose Argentina can produce one kilogram of beef for
$2.50 and Brazil can produce one kilogram of beef for
$2.90. Argentina is said to have a(n) in beef
production over Brazil. The gains from trade do not
depend on.
c. Comparative advantage is based on rather than
absolute costs.
d. It is possible for a country to have a comparative
advantage in some good and a(n) in none.
e. If all countries specialize in the production of goods for
which they have a comparative advantage, then world
output will.
f. If opportunity costs are the same in all countries, there is
no and no possibility of.
2. Fill in the blanks to make the following statements correct.
a. A product such as coffee beans is cheaply transported and
is traded around the world. The law of tells us that
it will tend to have worldwide price.
b. If the no-trade domestic price of copper wire in Canada is
$20 per unit and the world price is $24 per unit, then