Two countries will have zero incentive to trade if their production possibilities curves are parallel straight lines because

Question

Quizplus · Accepted Answer

If the production possibilities curves of two countries are parallel straight lines, it means that the opportunity costs of producing each good are the same in both countries. Therefore, there would be no advantage for either country to specialize in producing one specific good and trading with the other. Both countries would have no incentive to trade as they would essentially be producing the same goods at the same cost.

Two Countries Will Have Zero Incentive to Trade If Their