Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 9 - Part III - Application: International Trade - Quick Check Multiple Choice - Page 189: 1

Answer

a) the nation has a comparative advantage in producing steel and would become a steel exporter if it opened up trade.

Work Step by Step

A lower domestic price relative to the world price indicates that this nation has a comparative advantage in the production of steel. If it were to open up to trade, the nation's producers of steel would be eager to receive the higher world price and become exporters.
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