Given that countries A and B each specialize in the production of one good and voluntarily Jtrade it for the other country's good, then

Question

Quizplus · Accepted Answer

Both countries can experience positive gains from trade. By specializing in the production of one good and trading for the other, both countries can produce at a lower opportunity cost and therefore increase their total output. This leads to an increase in welfare for both countries as they can consume more of both goods than they could produce domestically on their own. Thus, both countries are better off through trade.

Given That Countries a and B Each Specialize in the Production