Imagine Two Countries, Zorba and Anduluvia

question 9

Essay

Imagine two countries, Zorba and Anduluvia. Zorba is producing everything at a lower resource cost than Anduluvia. If the two countries trade what is the reason?

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Definitions:

Fixed Pie

A concept in negotiations or economics that assumes the resources or benefits to be divided are limited and constant, with any gain by one side perceived as a loss by the other.

Negotiations

The process of discussing and arriving at a mutual agreement between parties with differing interests.

Arbitration

A form of dispute resolution where an impartial third party makes a binding decision to resolve a conflict.

Arbitrator

A neutral third party who is appointed to resolve a dispute between two or more parties by making a decision after considering all the relevant facts and arguments.