Web8 feb. 2024 · If two parties trade based on comparative advantage and both gain, the price of the trade must lie in the range of opportunity cost. If both parties concentrate on creating the goods they are most adept at making and trading with one another, commerce based on comparative advantage benefits both sides. WebIf a country has a comparative advantage in the production of a good: a. it can produce that good at a lower opportunity cost. b. it will not find trade beneficial because other country (ies)...
If two parties trade based on comparative advantageand both …
WebA trade between two parties is dependent on the opportunity costs of each party involved. One with a lower opportunity cost in producing a good is said to have a comparative advantage in making that good. WebIf both parties trade based on comparative advantage, then the price of the trade must lie within the range of the two parties' comparative advantages. Explanation: If both … projector infrared reflector
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WebIf two parties trade based on comparative advantage and both gain, in what range must the price of the trade lie? Verified Answer and Explanation. Explanation. When an entity chooses to produce an additional unit of a good, the production of something else has to be given up, and that is the opportunity cost of that good. WebComparative advantage determines which country will specialize in which good. The gains from trade are only based on comparative advantage, not on absolute advantage. A country or person can have an absolute advantage in both goods or activities, and yet still gain from trade by specializing in the good or activity in which it has a comparative ... WebFalse; trades can and do benefit both sides especially trades based on comparative advantage. If both sides did not benefit, trades would never occur. d. False; to be good for both parties, the trade price must lie between the two opportunity costs. e. False; trade that makes the country better off can harm certain individuals in the country. projector inforce