b. If perfect markets existed, would wages, prices, and interest rates among countries be more similar or less similar than under conditions of imperfect markets? Why?

a
Here is a tip:
The imperfect market theory is derived from the international market where no pure competition prevails.

Explanation
The trade between a domestic and foreign country is known as international trade.

The practical world experiences imperfect situations, where production factors are considerably immobile. Generally, multinational companies exploit resources of a particular foreign country where the market of several resources, such as labor and funds- utilized in the production, are imperfect. Instead of bringing resources to their domestic country, the firms set up business in the country where the factors of production are available but are immobile. Therefore, the imperfect markets serve as incentives for the development of subsidiaries in a foreign land.

Verified Answer
Imperfect markets result in subsidiaries in foreign countries due to restrictions on transferring funds, labor, and other resources among countries.

b
Explanation
The trade between a domestic and foreign country is known as international trade.

Perfect markets result in easy movability of factors used in production wherein labor and various resources would flow with the demand thereby, leading to similar costs across the nations. The cost will be equal to returns due to unrestricted mobility of factors and it will also eliminate the comparative cost advantage, which is the reason for international trade.

Verified Answer
Wages, prices, and other various resources among countries shall have more equality in the case of perfect markets, owing to the easy availability of such resources. More mobility leads to no shortage of resources in any country and can be utilized easily by any country that is ready to pay more.