Question

Which of the following statements regarding the foreign sector is/are correct?

a. Absolute advantage is a prerequisite for international trade.
b. Differences in resource endowments necessitate international trade.
c. Countries can only benefit from trade if the opportunity costs among the trading countries are the same.

[1] Only a and b
[2] Only and c
[3] Only b and c
[4] Only b
[5] Only c

Answer 1

[4] Only b -Differences in resource endowments necessitate international trade.