Under which circumstance is it not possible for nations to gain from trade?
A) identical production possibilities and identical tastes and preferences
B) different production possibilities and identical tastes and preferences
C) identical production possibilities and different tastes and preferences
D) different production possibilities and different tastes and preferences

Question

Quizplus · Accepted Answer

When nations have identical production possibilities and identical tastes and preferences, the opportunity for gains from trade does not exist as neither country can produce or consume anything that the other country cannot. Both nations have access to the same goods and services and there is no advantage to trading.

Under Which Circumstance Is It Not Possible for Nations to Gain