At some point, as the price of exported products is bid up and the price
Of the product imported falls, the prices of the products in both nations:
A)become more unequal.
B)approach zero.
C)approach infinity.
D)equalize.

Question

Quizplus · Accepted Answer

This scenario describes a situation of trade that is based on the principle of comparative advantage, where each nation produces and exports the goods it can produce most efficiently, and imports the goods it cannot produce as efficiently. As the market adjusts to this trade, the prices of the goods will equalize between the two nations. Therefore, the correct choice is D - the prices will equalize.

At Some Point, as the Price of Exported Products Is