Nation X produces and consumes only one good.This good is produced only with labor and all workers are exactly alike.One worker produces one unit of this good every day.One worker in Nation Y can produce two units of the good a day (and this is the only good they consume) .What will happen if there is open trade between the countries?
A) Nation X will import from Nation Y.
B) Nation X will outsource the production of the good to Nation Y.
C) Nation Y will import the good from Nation X.
D) No trade or outsourcing will take place.
Correct Answer:
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