6 Caves/Frankel/Jones - World Trade and Payments: An Introduction, Tenth Edition

16. In a world with many countries and only food and clothing, if countries all have the same

endowments but different tastes,

Answer: (c)

17. If a country experiences an improvement in technology,

Answer: (c)

18. Efficient consumption in autarky

Answer: (b)

19. In autarky, a preference shift towards food

Answer: (c)

20. If the relative world price of food is lower than the autarky price,

Answer: (c)

21. A sharply bowed-out production possibilities frontier embodies

Answer: (c)

22. A country that has a comparative advantage in clothing production

Answer: (e)

23. In autarky, a country produces a number of varieties of an aggregate good. Trade will

Answer: (d)

24. All of the following are sources of gains from trade except

Answer: (d)