Asked by justin motley on May 03, 2024
Verified
If two nations have straight-line production possibilities curves,
A) then their trading possibilities curves must lie inside the production possibilities curves.
B) there will be no basis for mutually advantageous trade.
C) there will be a basis for mutually advantageous trade whether the slopes are equal or not.
D) there will be a basis for mutually advantageous trade provided the slopes differ.
Production Possibilities Curves
A graphical representation that shows the maximum combination of goods and services that can be produced by an economy with given resources and technology.
Trading Possibilities Curves
Graphical representations showing the different combinations of goods that two countries can trade, given their resources and technology.
Mutually Advantageous Trade
Trade that benefits all parties involved, allowing each to gain something of value by exchanging goods or services.
- Comprehend the basis and benefits of mutual advantageous trade between nations.
Verified Answer
Learning Objectives
- Comprehend the basis and benefits of mutual advantageous trade between nations.
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