There will be no gains from specialization and trade between two countries if
1)neither country has an absolute advantage in the production of any good;
2)neither country has a comparative advantage in the production of any good;
3)opportunity costs differ too much between the two countries.

Question

Quizplus · Accepted Answer

Specialization and trade are beneficial when countries have a comparative advantage, meaning they can produce goods at a lower opportunity cost than others. If neither country has a comparative advantage, there are no gains from trade.

There Will Be No Gains from Specialization and Trade Between