Two countries that specialize where they have a comparative advantage and then trade with each other will experience increases in:
I. wages in both countries.
II. total output in both countries.
III. living standards in both countries.
A) I and II only
B) II and III only
C) II only
D) I, II, and III

Question

Quizplus · Accepted Answer

Countries that specialize in areas where they have a comparative advantage and trade with each other will experience increases in wages, total output, and living standards in both countries.

Two Countries That Specialize Where They Have a Comparative Advantage