Suppose that Burkina Faso, a nation in Africa, can produce cotton and medicinal plants and that the opportunity cost of producing one bale of cotton is two medicinal plants. Suppose that a neighboring nation, Togo, can produce those goods as well and that the opportunity cost of one bale of cotton is two medicinal plants. How would trade affecteach country?

Question

Quizplus · Accepted Answer

Since both countries have the same opportunity cost for producing cotton and medicinal plants, there is no comparative advantage for either country in specializing in one product over the other. Therefore, trade would not change their production patterns.

Suppose That Burkina Faso, a Nation in Africa, Can Produce