Trade between two nations is mutually beneficial if each specializes in the good in which it
Jhas a comparative advantage.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, when two nations specialize in producing the goods in which they have a comparative advantage and then trade these goods with each other, both nations can benefit and create a surplus. This is because each nation is able to produce the goods more efficiently and at a lower opportunity cost than the other nation. Therefore, trade between two nations is mutually beneficial if each specializes in the good in which it has a comparative advantage.

Trade Between Two Nations Is Mutually Beneficial If Each Specializes