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When Two Countries Decide to Follow Their Comparative Advantage and Engage

question 81

Essay

When two countries decide to follow their comparative advantage and engage in specialization and exchange,both countries experience gains from trade because they are able to consume at a point beyond their production possibilities frontier.Illustrate and explain how this is possible.


Definitions:

Court of Chancery

A court historically dealing with matters of equity, including trusts, estates, and breaches of fiduciary duty, operating with a foundation in principles of fairness.

Common Law Court

A type of court that bases its decisions on precedents, or previous judicial rulings, as well as statutes and legislation.

Civil Code

A comprehensive system of laws designed to deal with the core areas of private law such as property, family, and obligations.

Quebec

A province in Canada known for its French-speaking population and distinct legal and cultural identity.

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