Country B has the comparative advantage in ?

A. Wine
B. Beer
C. Both wine and beer
D. Neither wine nor beer

The relative price (MRT) of T in terms of S is ?

A. 2
B. 1/2
C. 500
D. 1000

If countries were to trade along the lines of comparative advantage ?

A. A would export x to b
B. A would export y to b
C. Neither country would want to trade
D. None of the above

Country A has an absolute advantage in ?

A. Beer
B. Wine
C. Both products
D. Neither products

In autarky the relative price of wine, in terms of beer, in Country B is ?

A. 1w = 3b
B. 1w = 4 1/2b
C. 1w = 5b
D. 1w = 6b

Mercantilism ?

A. Is the philosophy of free international trade?
B. Was a system of export promotion and barriers to imports practiced by governments?
C. Was praised by adam smith in the wealth of nations
D. Both (a) and (c)

The gains from international trade are closely related to ?

A. The labor theory of value
B. How much the autarky price differs from international terms of trade change
C. The fact that a country must lose from trade
D. All of the above

In the classical model of Ricardo, the direction of trade is determined by ?

A. Absolute advantage
B. Comparative advantage
C. Physical advantage
D. Which way the wind blows

Comparative advantage is determined by ?

A. Actual differences in labor productivity between countries
B. Relative differences in labor productivity between countries
C. Both (a) and (b)
D. Neither (a) nor (b)

Country B has an absolute advantage in ?

A. Product x
B. Product y
C. Neither x nor y
D. Both x and y