With trade, the production possibilities for two nationslie
a. outside their consumption possibilities.
b. inside their consumption possibilities.
c. at a point equal to the world production possibilitiescurve.
d. None of the answers above are correct.

4) Free-trade theory suggests that when trade takes place
a. both nations will be worse off.
b. one nation must gain at the other nation’s expense.
c. both nations are better off.
d. one nation will gain and the other nation will
be neither better nor worse off.