Asked by Kaitlyn Wallace on Apr 25, 2024
If country A can produce both goods X and Y more efficiently, that is, with smaller absolute amounts of resources, than can country B,
A) mutually advantageous specialization and trade between A and B may still be possible.
B) we can conclude that A is an industrially advanced economy and B is a developing economy.
C) it will necessarily be advantageous for B to import both X and Y from A.
D) then there is no possible basis for mutually advantageous specialization and trade between A and B.
Mutually Advantageous
A situation or agreement that benefits all parties involved.
Absolute Amounts
Quantities that are measured without any comparison or relation to other quantities, often referring to totals in financial contexts.
- Master the initial principles of international trade along with the concept of comparative advantage.
- Understanding the basis and limits for mutually beneficial trade between nations.
Learning Objectives
- Master the initial principles of international trade along with the concept of comparative advantage.
- Understanding the basis and limits for mutually beneficial trade between nations.
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