Asked by Brittany Cates on Jun 29, 2024
Verified
If the United States is more productive than Mexico in all lines of production,then the United States cannot benefit from trade with Mexico.
Productive
Being productive pertains to the capacity or efficiency of producing a considerable amount or result, typically in the context of economic goods and services.
Benefit From Trade
The advantage gained by countries, firms, or individuals from engaging in exchange, usually resulting in access to a wider variety of goods or services at lower costs.
- Acknowledge the advantages of trade between nations, even when one is more productive.
Verified Answer
SP
Steve PrietoJul 01, 2024
Final Answer :
False
Explanation :
Even when the United States is more productive than Mexico in all lines of production, they can still benefit from trade with Mexico. This is because the principle of comparative advantage states that a country should specialize in producing and exporting the goods in which it has a lower opportunity cost and import goods in which it has a higher opportunity cost. Therefore, even if the United States can produce all goods more efficiently than Mexico, it could benefit from trading with Mexico if there are some goods in which Mexico has a comparative advantage.
Learning Objectives
- Acknowledge the advantages of trade between nations, even when one is more productive.
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