Consider a two-country two-good model where labor is the only factor of production. Each country faces an increasing-cost production-possibility curve. In this model the amounts of both goods that are produced in a country in no-trade situation are determined by:
A)the relative prices of the goods.
B)the factor endowments in the economy.
C)technology differences between the industries.
D)the aggregate demand in the economy.

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The Answer of Consider a two-country two-good model where labor is the only factor of production. Each country faces an increasing-cost production-possibility curve. In this model the amounts of both goods that are produced in a country in no-trade situation are determined by:
A)the relative prices of the goods.
B)the factor endowments in the economy.
C)technology differences between the industries.
D)the aggregate demand in the economy.

Consider a Two-Country Two-Good Model Where Labor Is the Only