Trade between countries ( ) A: allows<br/>each country to consume at a point outside its production<br/>possibilities frontier. B: limits<br/>a country’s ability to produce goods and services on its own. C: must<br/>benefit both countries equally; otherwise, trade is not mutually<br/>beneficial. D: can<br/>best be understood by examining the countries’ absolute<br/>advantages.

In the Linder theory of trade, a country sends goods to other countries which , and the greatest trade of a country is expected to be with countries which have per capita income levels that of the original country.

If country A has a comparative advantage in producing shoes, then________________________.（ ）. A: other countries will never produce shoes if trade is allowed B: it can produce shoes at lower opportunity costs than other countries can C: it has more factors of production used in the production of shoes relative to other countries D: it can produce shoes using more resources than other countries can

The law of comparative advantage ( ). A: explains how a country can benefit from trade even if it has absolute disadvantage in production of all commodities. B: explains how the most efficient nations can benefit from trade. C: was introduced by Adam Smith. D: is used to explain the trade between intra-industry trade.

_______explains how mutually beneficial trade can take place even when one nation is less efficient than another nation in the production of all commodities.（ ） A: Mercantilism B: The law of comparative advantage C: The labor theory of value D: The law of absolute advantage