As long as two people have different opportunity costs,each can gain from trade,since trade allows each person to obtain a good at a price lower than his or her opportunity cost.

Question

Quizplus · Accepted Answer

This statement accurately reflects the concept of comparative advantage and the benefits of trade. If two individuals or countries have different opportunity costs for producing a good, they can specialize in producing the good with the lowest opportunity cost and trade with the other for the good with the higher opportunity cost. This allows each party to obtain a good at a lower cost than if they tried to produce it themselves. Therefore, both parties benefit from the trade.

As Long as Two People Have Different Opportunity Costs,each Can