1. The following statements refer to community or social indifference curves. (i.) (ii.) These curves are usually assumed to characterize a country's tastes and wellbeing. In an open economy with trade, a country's welfare is maximized when that country's indifference curve is just tangent to that country's production possibilities frontier. Community indifference curves that are relative steep signify that a country's tastes tend to favor the good depieted on the horizontal axis relative to the good along the vertical axis. (iii.) Choose the best answer. a. All the above statements are true. b. Statements (ii) and (iii) are true. c. Statements (i) and (iii) are true. d. Only statement (iii) is true.

1. The following statements refer to community or social indifference curves. (i.) (ii.) These curves are usually assumed to characterize a country's tastes and wellbeing. In an open economy with trade, a country's welfare is maximized when that country's indifference curve is just tangent to that country's production possibilities frontier. Community indifference curves that are relative steep signify that a country's tastes tend to favor the good depieted on the horizontal axis relative to the good along the vertical axis. (iii.) Choose the best answer. a. All the above statements are true. b. Statements (ii) and (iii) are true. c. Statements (i) and (iii) are true. d. Only statement (iii) is true.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter19: International Trade

Section: Chapter Questions

Problem 1.3P

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