The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
FIGURE 33- 5
-According to David Ricardo's principle of comparative advantage,there will be gains from international trade

Question

The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
  FIGURE 33- 5
-According to David Ricardo's principle of comparative advantage,there will be gains from international trade

Quizplus · Accepted Answer

According to David Ricardo's principle of comparative advantage, gains from international trade can be achieved by any country with opportunity costs that are different from those of other countries. This means that a country may be able to produce a good at a lower opportunity cost than another country, even if it does not have an absolute advantage in producing that good. In the given scenario, if Paperland has a lower opportunity cost for producing newsprint than another country, it will benefit from international trade.

The Diagram Below Shows the Domestic Demand and Supply Curves