Suppose there are only 2 nations A and B,and only two goods,x and y.If nation A produces only x,it can make 20x per day.If nation A produces only y,it can make 15y per day.If nation B produces only x,it can make 15x per day.If nation B produces only y,it can make 15y per day.After trade begins nation ________ will specialize in the production of x and nation ________ will specialize in the production of y.

Question

Quizplus · Accepted Answer

Nation A has a comparative advantage in producing x because it can produce 20x per day as compared to nation B which can produce only 15x per day. 
Nation B has a comparative advantage in producing y because it can produce 15y per day as compared to nation A which can produce only 15y per day. 
Therefore, after trade begins, nation A will specialize in producing x and nation B will specialize in producing y.

Suppose There Are Only 2 Nations a and B,and Only