The principle of comparative advantage suggests that,if Ontario and Quebec exchange taxi parts for peaches,each province will be made worse off.

Question

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The principle of comparative advantage suggests that each province should specialize in producing the good in which they have a lower opportunity cost relative to the other province. By doing so, both provinces can increase their overall level of consumption and be better off. Therefore, if Ontario and Quebec specialize in producing taxi parts and peaches respectively and trade with each other, both provinces can be better off.

The Principle of Comparative Advantage Suggests That,if Ontario and Quebec