Refer to the Figure Shown, Which Represents the Production Possibilities

question 108

Multiple Choice

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:

• A) neither country will benefit from trade.
• B) both countries can benefit from trade because absolute advantage exists.
• C) both countries could benefit from trade because comparative advantage exists.
• D) only Country A will benefit from trade.

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