Question

The Nobel Prize-winning economist Paul Samuelson argued that contrary to the standard interpretation, in certain circumstances the theory of comparative advantage predicts that a rich country might actually be worse off by switching to a free trade regime with a poor nation.
a. True.
b. False.

Answer 1

Answer:

True

Explanation:

Paul Samuelson was an economist and he was the first American to win the Nobel Prize in Economic science. The journey into coming up with comparative advantage started when Stanislaw Ulam challenged him to name a proposition of social science is true and at the same time non-trivial and this led to the Paul's developing comparative advantage years later.

Paul Samuelson however, also argued that while the standard interpretation says a country is better off when it is rich in trading with a poor nation, it is also true that there are circumstances that might leave a rich country worse off  when it switches to a free trade rich with a poor nation.