Whenever the opportunity costs of goods are significantly different in different countries, there are gains from specialization and trade.

Question

Quizplus · Accepted Answer

This statement is true because if the opportunity costs of goods are significantly different in different countries, it means that one country has a comparative advantage in producing some goods while the other country has a comparative advantage in producing other goods. Specialization and trade allow each country to focus on producing the goods in which they have a comparative advantage, leading to a more efficient allocation of resources and increased overall production of goods.

Whenever the Opportunity Costs of Goods Are Significantly Different in Different