8. In a two product two country world, international trade can lead to increases inA) total production of both products but not consumer welfare in both countries.B) prices of both goods in both countries.C) consumer welfare only if output of both products is increased.D) output of both products and consumer welfare in both countries.E) consumer welfare in both countries but not total production of both products.

A product is produced in a monopolistically competitive industry with scale economies. If thisindustry exists in two countries, and these two countries engage in trade with each other, then wewould expectA) the country with a relative abundance of the factor of production in which production of theproduct is intensive will export this product.B) the countries will trade only with other nations they are not in competition with.C) the country in which the price of the product is lower will export the product.D) neither country will export this product since there is no comparative advantage.E) each country will export different varieties of the product to the other.

Which of the following is not true regarding International trade?Question 20Select one:a.its underlying proposition is that consumers and producers benefit from exchange of goods and services.b.it involves the transfer of goods and services between countries.c.it only benefits developed countries while exploiting underdeveloped countries.d.it increases a country’s welfare or standard of living. e.it occurs because a country can purchase goods abroad more cheaply than it can produce them at home.

. Trade between two countries can benefit both countries ifA) each country enjoys superior terms of trade.B) each country has a more elastic demand for the imported goods.C) each country has a more elastic supply for the exported goods.D) each country produces a wide range of goods for export.E) each country exports that good in which it has a comparative advantage.

9. The Ricardian model demonstrates thatA) trade between two countries may benefit both regardless of which good each exports.B) trade between two countries may benefit both if each exports the product in which it has acomparative advantage.C) trade between two countries will benefit both countries.D) trade between two countries may benefit one but harm the other.E) trade between two countries always benefits the country with a larger labor force.

8) A country will be able to consume a combination of goods that is not attainable solely fromdomestic production ifA) the country specializes in one product.B) the world terms of trade equal the domestic relative costs.C) the country's domestic production value equals world relative value.D) the world terms of trade differ from its domestic relative costs.E) the country avoids international trade.