Suevania opens its doors to trade with Barvania.Barvania has a comparative advantage in the production of machinery.Hence,once trade occurs Suevania's consumers will buy ________ machinery and pay ________ before.

Question

Quizplus · Accepted Answer

When a country opens its doors to trade with another country that has a comparative advantage in the production of a good, in this case, machinery, consumers in the importing country will typically be able to buy more of that good at a lower price than before. This is because the exporting country's comparative advantage allows it to produce the good more efficiently, thus at a lower cost, which can be passed on to consumers in the form of lower prices.

Suevania Opens Its Doors to Trade with Barvania