Answered

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To achieve gains from trade, each nation should specialize in the production of a good or service if:
A. the country can make that good or service while forgoing the production of fewer alternative products than any other country.
B. the country can make that good or service using fewer resources than any other country.
C. its production possibility frontier is farther from the origin than that of any other country.
D. its production possibility frontier is closer to the origin than that of any other country.

Sagot :

Answer:

A

Explanation:

A country gains from trade if it specialises in the production of the good for which it has a comparative advantage

A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries. this means that the country can produce the good by forgoing fewer alternative products

For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.  

for country A,  

opportunity cost of producing beans = 5/10 = 0.5

opportunity cost of producing rice = 10/5 = 2

for country B,  

opportunity cost of producing rice = 5/10 = 0.5

opportunity cost of producing beans = 10/5 = 2

Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice

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