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Figure: Market for Watches in Countries A and B
-(Figure: Market for Watches in Countries A and B)Referring to the graphs,we see that,as a result of free trade,producers of watches in Country A ____ and producers of watches in Country B ____.

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Use the following to answer questions 
Figure: Market for Watches in Countries A and B 
-(Figure: Market for Watches in Countries A and B)Referring to the graphs,we see that,as a result of free trade,producers of watches in Country A ____ and producers of watches in Country B ____.

Quizplus · Accepted Answer

In free trade, producers in the country with a comparative advantage (lower opportunity cost) will gain, while producers in the country with a comparative disadvantage (higher opportunity cost) will lose. In this case, Country A has a comparative advantage in watch production, so its producers will gain from free trade. Country B has a comparative disadvantage in watch production, so its producers will lose from free trade.

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