Table 3-5

-Refer to Table 3-5. If Japan and Canada trade based on the principle of comparative advantage, which of the following is correct?
A)All individuals in both countries will gain.
B)Car producers in Japan and airplane producers in Canada will gain.
C)Some individuals within each society will be made worse off.
D)One country will be better off and the other country will be worse off.

Question

Table 3-5
 
-Refer to Table 3-5. If Japan and Canada trade based on the principle of comparative advantage, which of the following is correct?
A)All individuals in both countries will gain. 
B)Car producers in Japan and airplane producers in Canada will gain. 
C)Some individuals within each society will be made worse off. 
D)One country will be better off and the other country will be worse off.

Quizplus · Accepted Answer

When countries trade based on comparative advantage, overall economic welfare increases, but some individuals or industries may be worse off due to increased competition or shifts in production.

Table 3-5 -Refer to Table 3-5. If Japan and Canada Trade Based