To measure the gains from trade, we need to consider the relative prices in the two countries.

Question

Quizplus · Accepted Answer

To measure the gains from trade, we need to compare the relative prices in the two countries before and after trade occurs, as this helps to determine which goods or services each country should specialize in producing and exporting. By doing so, both countries can benefit from lower prices, increased production, and a more efficient allocation of resources.

To Measure the Gains from Trade, We Need to Consider