Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B After examining each country's production possibilities curve, it is clear that:

Question

Quizplus · Accepted Answer

The production possibilities frontiers for both countries indicate that there is potential for specialization and trade, meaning that both countries have a comparative advantage in producing certain goods. Therefore, both countries could benefit from trade by producing the goods they have a comparative advantage in and exchanging them with the other country.

Refer to the Figure Shown, Which Represents the Production Possibilities