Table 18-2 Food 10 18 16 24 32 Italia Clothing 18 6 14 2 0 Food 10 4 18 12 16 Slavia Clothing 8 6 4 2 0 Refer to Table 18-2. The law of comparative advantage suggests that both countries could gain if Slavia traded food for clothing produced in Italia. neither country could gain from trade, even if the costs of transporting the products were zero. both countries could gain if Italia traded food for clothing produced in Slavia. Italia could not gain from trade because it has an absolute advantage in producing both goods.

Table 18-2 Food 10 18 16 24 32 Italia Clothing 18 6 14 2 0 Food 10 4 18 12 16 Slavia Clothing 8 6 4 2 0 Refer to Table 18-2. The law of comparative advantage suggests that both countries could gain if Slavia traded food for clothing produced in Italia. neither country could gain from trade, even if the costs of transporting the products were zero. both countries could gain if Italia traded food for clothing produced in Slavia. Italia could not gain from trade because it has an absolute advantage in producing both goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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