If Tom and Di Specialize in Producing the Goods in Which

question 396

Multiple Choice

If Tom and Di specialize in producing the goods in which he and she have a comparative advantage and they exchange goods, then_________ .

• A) they will lose because they are no longer able to produce and consume both goods.
• B) each will gain because each can consume a combination of goods that is outside her/his production possibility frontier
• C) one of them will gain and the other will lose
• D) each will produce a combination of goods that is within her/his production possibility frontier