Two Countries Will Choose to Specialize and Trade Only If

question 145

Multiple Choice

Two countries will choose to specialize and trade only if:

• A) the terms of trade fall between the two nations' opportunity costs for producing the goods on their own.
• B) the opportunity costs are the same for the two nations.
• C) the opportunity costs for producing the goods on their own are astronomically high.
• D) one country has an absolute advantage at producing both goods, but a comparative advantage at producing only one good.

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