If two nations have straight-line production possibilities curves,

Question

Quizplus · Accepted Answer

When two nations have straight-line production possibilities curves, the basis for mutually advantageous trade exists if the slopes of their production possibilities curves differ. This difference in slopes indicates that the opportunity costs of producing goods are different between the two countries, allowing each to benefit from specializing in the production of the good for which it has a lower opportunity cost and trading for the other good.

If Two Nations Have Straight-Line Production Possibilities Curves