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1 Old Textbook Reading Comprehension Questions: Unit IV1. Which of the following statements regarding free international trade is true? 1.Free international trade leads to a more equitable, or more equal, division of world-wide economic surplus. 2.Free international trade increases economic surplus for countries that have the absoluteadvantage but decreases economic surplus for countries that do not have the absoluteadvantage. 3.Free international trade increases economic surplus for countries that have the comparativeadvantage but decreases economic surplus for countries that do not have the comparativeadvantage. 4.Free international trade leads to an increase in world-wide production because it allows for a more efficient allocation of world-wide resources.5.All of the above 2. Why might a country restrict free trade? 3. Suppose a country is completely closed to international trade so that all purchases and sales of products within the country have to be produced within the country. If this country does not have the comparative advantage in the production of computers, then we can predict that the domestic market price of computers will be _____. 4. Which of the following statements is nottrue? 1.World production levels increase when countries specialize in their comparative advantage and trade with each other 2.When countries specialize in their comparative advantage there is a better world wide allocation of resources. 3.Both importing and exporting countries benefit from free trade. 4.Free trade is good for every individual within a country. 5.Free trade results in increased competition which generally drives down prices. 5. Free trade is good for a country: