Question 8 2 pts Voluntary free trade results in higher livi

Question 8 2 pts Voluntary free trade results in higher living standards. income disparity. inflation. population growth. unemployment.

Solution

Voluntary free trade results in better standards of living according to neoclassical economists as they feel that it will result in efficent trade and provide consumer with the best quality products at lower prices and result in more efficient markets.

If 10 miles of roads cost 1 million

and 2 miles of light rail costs 10 million,

opportunity cost (the cost foreskaen of the next best alternative) of 1000 miles of roads will be

= 200 miles of light rail