Without international trade ability of nation to specialize

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Reference no: EM131425950

1) If South Korea gains a comparative advantage in automobile manufacturing relative to the U.S., free trade will cause relative increases in the wage rate in the South Korean auto industry but labor producing automobiles in the U.S will see relative wage decreases.

True

False

2) Without international trade the ability of a nation to specialize in what it produces relatively more efficiently would be meaningless and its production possibilities would always be equal to its consumption alternatives.

True

False

3) If Bob can type faster than Sally and Sally can write better than Bob, then Bob should do all the writing so as to have more to do and Sally should do all the typing so as to have more to do. In that way, they can produce more output per hour of work than if they switched tasks.

True

False

Reference no: EM131425950

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