Russia and Kazakhstan both produce horses and oil. If Kazakhstan is much more efficient than Russia in the production of horses and slightly more efficient than Russia in the production of oil, _____ can benefit from trading horses and oil with each other.

Question

Quizplus · Accepted Answer

Both countries can benefit from trading with each other as Kazakhstan's efficiency in producing horses and oil means that they can sell these products at a lower cost. Russia can benefit from buying these products at a lower price while Kazakhstan can benefit from selling them at a higher price than their production cost, thus increasing their overall revenue. This results in a mutually beneficial trade for both countries.

Russia and Kazakhstan Both Produce Horses and Oil