Which situation describes when mutually beneficial trade occurs? Group of answer choices Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Country A increases production of strawberries, and Country B increases production of kiwis. When Country A trades with Country B to obtain kiwis, and when Country B trades with Country A to obtain strawberries, both countries can benefit.
Which situation describes when mutually beneficial trade occurs? Group of answer choices Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Country A increases production of strawberries, and Country B increases production of kiwis. When Country A trades with Country B to obtain kiwis, and when Country B trades with Country A to obtain strawberries, both countries can benefit.
Chapter28: International Trade And Finance
Section: Chapter Questions
Problem 1SQP
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Which situation describes when mutually beneficial trade occurs?
Group of answer choices
Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Country A increases production of strawberries, and Country B increases production of kiwis. When Country A trades with Country B to obtain kiwis, and when Country B trades with Country A to obtain strawberries, both countries can benefit.
Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Country A increases production of strawberries, and Country B decreases production of kiwis. When Country A trades with Country B to obtain kiwis, and when Country B trades with Country A to obtain strawberries, both countries can benefit.
Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Neither country wants any of the produce they have a comparative advantage in, so both nations can benefit from trade.
Country A has a comparative advantage in producing strawberries. Country B has a comparative advantage in producing kiwis. Mutually beneficial trade is not possible because in any transaction, one party wins and the other party loses.
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ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
