Which of the following does not contribute to a basis for trade between two countries?
A) different tastes and preferences
B) different technologies
C) different relative factor endowments
D) different absolute factor endowments, but the same relative endowments

Question

Quizplus · Accepted Answer

Different absolute factor endowments, but the same relative endowments would not contribute to a basis for trade between two countries as there would be no comparative advantage in producing certain goods or services. The other options (A, B, and C) all contribute to a basis for trade as they result in differences in production efficiency and costs between countries, allowing for mutually beneficial trade.

Which of the Following Does Not Contribute to a Basis