Trade between two countries can be useful if cost ratios of goods are ?
Correct answer: B. Different
- A. Equal
- B. Different
- C. Undetermined
- D. Decreasing
Explanation
Comparative advantage makes trade beneficial when countries face different relative costs or cost ratios for producing goods. If cost ratios are equal, neither country has a comparative cost advantage.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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