Question

Suppose two countries are each capable of individually producing two given commodities. Instead, each specializes by producing the commodity for which it has a comparative advantage and then trades with the other country. Which of the following is most likely to result?
A. There will be more efficient production in one country but less efficient production in the other.B. Unemployment will increase in one country and decrease in the other.C. The two countries will become more independent of each otherD. Both countries will be producing their commodity inefficiently.E. Both countries will become better off.

Answer 1

Answer:

E. Both countries will become better off.

Explanation:

A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

If a country produces goods for which it has a comparative advantage in its production, both countries become more efficient and better off

Answer 2

Answer:

e

Explanation: