If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible.
A)marginal
B)explicit
C)opportunity
D)implicit

Question

Quizplus · Accepted Answer

If the opportunity cost of production for two goods is different between two countries, then each country can specialize in producing the good that has a lower opportunity cost for them and trade with the other country for the good that has a higher opportunity cost for them. This creates gains from trade for both countries. Marginal cost refers to the cost of producing one additional unit and is not relevant for determining whether trade is mutually beneficial. Explicit and implicit costs are not relevant for determining whether trade is mutually beneficial.

If the ________ Cost of Production for Two Goods Is