Q8 Suppose that the world economy consists of Country A and Country B. both of which are of similar size. Both countries produce Good 1 and Good 2. Suppose Country A and Country B open for trade and the world price for Good 2 is $20. This results in Country Bimporting 200 units of Good 2 from Country A. Which of the following must be true?Country A has comparative advantage in Good 2Country A has comparative advantage in Good 1Country B has comparative advantage in Good 1o Country B has comparative advantage in Good 2

Country which has a comparative advantage in a product specialises in that product. It becomes an…

Business

Economics

Q8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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