A country will realize no gains from trade if
A) pre-trade and free-trade relative prices are identical.
B) all countries employ the same technology.
C) it does not have an absolute advantage in at least one good.
D) its wage exceeds the world average.
E) pre-trade and free-trade relative prices are not identical.

Question

Quizplus · Accepted Answer

If pre-trade and free-trade relative prices are identical, there is no comparative advantage to exploit, and thus no gains from trade.

A Country Will Realize No Gains from Trade If