- Refer to the above diagrams. Assume that prior to specialization and trade Italy and Greece preferred points I and G on their production possibilities curves. As a result of complete specialization according to comparative advantage, the resulting gains in output will be:

Question

Quizplus · Accepted Answer

The gains in output from specialization according to comparative advantage are 5X and 15Y, as these represent the increase in production when each country specializes in the good for which it has a comparative advantage.

- Refer to the Above Diagrams