Gains of trade are possible for two countries if they have:

Question

Quizplus · Accepted Answer

Gains of trade are possible when two countries have different opportunity costs. Opportunity cost is the cost of the next-best alternative use of a resource. If two countries have different opportunity costs, they can specialize in producing the goods and services that they have a comparative advantage in and trade with each other. This leads to an increase in the overall output and consumption of both countries.

Gains of Trade Are Possible for Two Countries If They