If Japan and France have identical production possibilities frontiers and identical community indifference curves, then
A) Japan will enjoy all the gains from trade.
B) France will enjoy all the gains from trade.
C) Japan and France share equally in the gains from trade.
D) gainful specialization and trade are not possible.

Question

Quizplus · Accepted Answer

If Japan and France have identical production possibilities frontiers and identical community indifference curves, there would be no basis for trade because neither country has a comparative advantage in producing any good more efficiently than the other. Trade occurs when countries can specialize in what they produce most efficiently relative to each other and then exchange those goods.

If Japan and France Have Identical Production Possibilities Frontiers and Identical