If a nation begins to trade, it will be able to sell (export) the product for which its own relative price is:

Question

BlackTom AI · Accepted Answer

When analyzing the statement about trade and export pricing, we need to consider how relative prices determine comparative advantage. 
Option 1: 'less than 10% of the value in other nations.' This is overly precise and not a general rule of trade theory. Relative prices are not defined by a fixed percentage like '10%'; they depend on relative costs, technologies, and market conditions, so this specific figure is not a sound basis for deciding exportability. 
Option 2: 'higher than that in other nations.' If a nation could fetch a higher price domestically than abroad for the same product, there would be little incentive to export that good because selling abroad would yield less revenue relative to domestic sales. In a simple trade framework, exporters typically sell goods where their own relative price is lower than the world price, not higher. This makes exporting the good less feasible or less advantageous under standard comparative advantage reasoning. 
Option 3: 'lower than that in other nations.' This aligns with the core idea of comparative advantage: a country exports goods for which its own relative price is lower than in other nations, meaning it can sell abroad at a competitive price while still maintaining profitability domestically. This price relationship creates an incentive to specialize and trade. 
Option 4: 'the same as that in other nations.' If the relative price were identical across countries, there would be no inherent incentive to trade based on price differences alone. While trade can occur for other reasons (such as scale, variety, or non-price factors), the classic model emphasizes price differences as the driver of export activity, so sameness would not explain a straightforward export motive. 
Overall, the reasoning centers on the principle that exports arise from a lower domestic relative price relative to other nations, which makes foreign sales advantageous while leveraging domestic production.

01:220:300:01 INTERNATIONAL ECON Specific factors model practice questions (not for credit)

If a nation begins to trade, it will be able to sell (export) the product for which its own relative price is:

查看解析

登录即可查看完整答案

类似问题

According to the data, if Mr. X and Ms. Y have the opportunity to trade, which of the following will be mutually beneficial?

The table given below shows how many smartphones or cars can be produced in China and Japan. Country Cars Smartphones China 30 40 Japan 30 20 To achieve gains from specialization and trade

The following table shows the output per week of two people, Alice and Bob. They can either devote their time to making hats or making umbrellas. Which of the following statements is true?

What assumption in Ricardo’s theory of comparative advantage makes it less applicable to modern global trade dynamics?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单