Suppose that no comparative advantage exists between the nations of Alpha and Beta. We can conclude that:

Question

Quizplus · Accepted Answer

When no comparative advantage exists between two nations, it means that the opportunity cost of producing goods relative to each other is the same in both countries. Therefore, there will be no gains from specialization and trading with each other, as neither country can produce a good more efficiently relative to the other.

Suppose That No Comparative Advantage Exists Between the Nations of Alpha