Asked by Yassen Kafagi on Jun 28, 2024
Verified
The nation of Loneland does not allow international trade. In Loneland, you can buy 1 pound of beef for 2 pounds of cheese. In neighboring countries, you can buy 2 pounds of beef for 3 pounds of cheese. If Loneland were to allow free trade, it would export cheese.
International Trade
The exchange of goods and services between countries, driven by comparative advantage and resulting in increased economic efficiency.
Export Cheese
The process of selling and shipping cheese to other countries from the country of origin.
- Acquire insight into the factors influencing a nation's role as an importer or exporter of merchandise.
Verified Answer
VB
Virgilia BeemanJul 03, 2024
Final Answer :
True
Explanation :
Given the exchange rates, Loneland has a comparative advantage in producing cheese since it requires less cheese to get the same amount of beef compared to neighboring countries, indicating it would export cheese if trade were allowed.
Learning Objectives
- Acquire insight into the factors influencing a nation's role as an importer or exporter of merchandise.