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- Subject
- Foundations Of Modern Trade Theoryeconomics-mcqs › foundations-of-modern-trade-theory
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
If the price of good S in country A without trade is lower than in country B, what is the expected outcome once trade is permitted?
Multiple choice question for Foundations Of Modern Trade Theory. Select an option, then review the explanation below.
Explanation
If country A has a lower autarky price for good S compared to country B, it means A can produce S more cheaply. Therefore, when trade opens, country A is expected to export good S to country B.
More Foundations Of Modern Trade Theory MCQs
Practice related questions from the same subject.
- 1.According to G. MecDougall's research, what relationship did he find between labor productivity and export ratios?
- 2.Which of the following factors can contribute to dynamic gains from trade?
- 3.Under conditions of free trade, when would Canada fail to gain any benefits from trading with Sweden?
- 4.In a self-sufficient economy, where does the production point lie when the community optimizes its living standards?
- 5.In an economy, when a society achieves the highest possible standard of living, where is its production and consumption point located?