Question

Economists have long recognized a persistent and unfounded belief among the

population which has come to be known as the anti-foreign bias. As a result of this

bias, most people systematically underestimate the economic benefits of interactions

with foreign nations. Some psychologists believe that this bias is rooted in a natural

distrust of the “other,” while others believe that a form of folk wisdom, seemingly in

accord with common sense but nonetheless incorrect, explains the bias.

This wisdom asserts that in any transaction there is a winner and a loser and any

foreign nation that wants to engage in trade must be doing so because it seeks its

own advantage. But nothing could be further from truth. No less an authority than

Adam Smith, one of the fathers of the modern free market system, spoke glowingly

of foreign trade in his influential treatise Wealth of Nations. “What is prudence in the

conduct of every private family, can scarce be folly in a great kingdom,” said Smith.

His point is simple. A baker trades his bread to the cobbler for shoes and both men

benefit from the trade because of the value of specialization. The same principle

works for nations. Even more startling, a basic economic theorem, the Law of

Comparative Advantage, states that mutually beneficial trade is possible even if one

nation is less productive than the other.Suppose a citizen of Country X can produce either 10 computers or five bushels of

wheat and a citizen of Country Y can produce either three computers or two bushels

of wheat. If one citizen from Country X switches from producing wheat to computers

and three citizens from Country Y switch from producing computers to wheat, there

is a net gain of one computer and one bushel of wheat.

Questions

1. The passage is primarily concerned with which of the following?

(a) Arguing for an increase in trade with foreign nations.

(b) Providing a historical context for a long-standing belief.

(c) Demonstrating the fallacy of a particular way of thinking.

(d) Illustrating an economic principle through an example.​

Answer 1

you can get link to w I have to unlock the door and I don't r

Answer 2

Answer:

d.

Explanation:

Illustrating an economic principle through an example.