Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state that
A)the two nations should not specialize in the production of goods.
B)specialization can lead to an increase in the production of all goods.
C)specialization can lead to an increase in the consumption of all goods.
D)neither country has a comparative advantage in the production of any good.

Question

Quizplus · Accepted Answer

When two nations have different opportunity costs for producing goods, they can benefit from specializing in the production of goods for which they have a comparative advantage, leading to an increase in the consumption of all goods through trade.

Suppose That the Opportunity Cost of Producing Goods Differs Between