Explains how mutually beneficial trade can take place even when one nation is less efficient than, or has an absolute disadvantage with respect to, another nation in the production of all commodities. The less efficient nation should specialize in and export the commodity in which its absolute disadvantage is smaller (this is the commodity of its comparative advantage), and should import the other commodity

Question

Business

Tyrese Henry

22 June, 10:19

Explains how mutually beneficial trade can take place even when one nation is less efficient than, or has an absolute disadvantage with respect to, another nation in the production of all commodities. The less efficient nation should specialize in and export the commodity in which its absolute disadvantage is smaller (this is the commodity of its comparative advantage), and should import the other commodity

+1

Answers (1)

Know the Answer?

Skyler Mccall · Answer 1

Beneficial trade between two countries is the form of trade that allows them to enjoy total output and higher level of consumption which is more than there resource capacity

Explanation:

This is a situation whereby an agreement is made between countries to exchange in goods they have comparative advantage in.