Benefits from trade increase when?

A. Trading partners have different PPC s

B. Each party acts in accordance with his or her absolute advantage

C.*Each party s PPC coincide with each other . I.e., corresponds to that of the other':

D. Trading partners have similar opportunity costs

The Cost-Benefit Principle predicts that people will take an action when

A.marginal benefits exceed marginal costs

B. average costs exceed average benefits

C. average benefits exceed average costs

D. Costs exceed benefits

Why does the PPC of two goods have a concave shape?

A- To represent the scarcty of two goods

B- Because only demand curves have a concave shape

C- Because only supply curves have a convex shape

D- because ony demand curves nave a convex shape

An economic model

A- does not have restrictive assumptions

B- relies heavily on simplifying assumptions

C- lacks essential features of a situation

D- completely and perfecly descnbes the situation it considers

Benefits from trade increase when

A-One party s PPC is as flat as possible whereas the others is as steep as possible

B- Each party acts in accordance with his or her absolute advantage

C-Trading partners have similar opportunity costs

D-Each party s PPC is very similar