If the relative costs of producing two goods differ in two countries,international trade will be mutually advantageous.

Question

Quizplus · Accepted Answer

If the cost of producing two goods differs in two countries, then they can specialize in the production of the good that they can produce more efficiently or at a lower cost. By trading with each other, both countries can benefit from the exchange of goods and services, leading to mutual gains from trade.

If the Relative Costs of Producing Two Goods Differ in Two