If Tyler and Alex are trading partners, do their gains from trade depend on whether Tyler and Alex live in the same country?
A) It is better if Tyler and Alex are both Americans.
B) It is better if one of them is American and one is not.
C) It is better if neither of them is American.
D) It doesn't matter in which country Tyler and Alex live.

Question

Quizplus · Accepted Answer

The gains from trade between Tyler and Alex do not depend on the country they live in. As long as they have different resources or abilities and can specialize in the production of goods or services they are relatively better at, both of them can benefit from trade regardless of their nationalities or locations. Therefore, it doesn't matter where they live.

If Tyler and Alex Are Trading Partners, Do Their Gains