Comparative advantage determination requires holding the level of inputs the same among nations. The converse is that if you hold output the same among nations, there will be fewer inputs and hence a lower opportunity cost for the good in which a nation has a comparative advantage.a. Trueb. False2. Comparative advantage explains why the U.S. is currently a net exporter in the virtual market place.a. Trueb. False3. If two nations can gain from trade through specialization then all citizens in both nations will be happier and better off.a. Trueb. False4. The redistributive effects of trade often show up when politicians attempt to protect jobs in a relatively less efficient industry.a. Trueb. False5. If South Korea gains a comparative advantage in automobile manufacturing relative to the U.S., free trade will cause relative increases in the wage rate in the South Korean auto industry but labor producing automobiles in the U.S will see relative wage decreases.a. Trueb. False6. If absolute advantage exists comparative advantage certainly does not and that is why absolute advantage is a more general explanation of why nation’s trade than is comparative advantage.a. Trueb. False7. Laura works for the UAW in Detroit and has recently been laid off. She contends that free trade just doesn’t work. Her opinion could not have been predicted by the economic theory of free trade.a. Trueb. False8. If output among nations producing the same good is held constant, then national differences in the levels of inputs required to produce that good imply that the consumption possibilities for all nations can be increased through specialization and free trade.a. Trueb. False9. The U.S. auto industry had a comparative advantage in the past and that means it still has one now.a. Trueb. False10. If nations specialize and trade in terms of comparative advantage then all producers in those nations will be made better off.a. Trueb.

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