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 16x per day.If nation A produces only y,it can make 4y per day.If nation B produces only x,it can make 20x per day.If nation B produces only y,it can make 4y 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 B has a comparative advantage in producing x as it can produce 20x per day compared to A's production of 16x per day. Nation A has a comparative advantage in producing y as it can produce 4y per day compared to B's production of 4y per day. Therefore, nation B will specialize in producing x and nation A will specialize in producing y.

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