If the trade line that passes through the production point on the PPC has a slope that is shallower than the slope of the PPC at the same point,then
A)the country can get greater gains from trade if it moves production away from the vertical axis.
B)the country can get greater gains from trade if it moves production toward the vertical axis.
C)the country cannot improve on its gains from trade.
D)There are no gains from trade in this example.
E)There is not enough information to tell how it can improve its gains from trade.

Question

Quizplus · Accepted Answer

If the trade line is shallower, it means the opportunity cost of the good on the horizontal axis is lower in trade than in production, so moving production away from the vertical axis can increase gains from trade.

If the Trade Line That Passes Through the Production Point