Answered: Suppose two countries produce the same…

Suppose two countries produce the same twogoods and have identical production possibilitiesfrontiers. Do you expect these countries to trade?Explain why or why not.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 2P

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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Suppose two countries produce the same two
goods and have identical production possibilities
frontiers. Do you expect these countries to trade?
Explain why or why not.

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