Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 3 - Part I - Interdependence and the Gains from Trade - Quick Check Multiple Choice - Page 59: 3

Answer

a. they both obtain consumption outside their production possibilities frontier.

Work Step by Step

A comparative advantage is the ability to produce a good at a lower opportunity cost than another producer. When two people trade based on comparative advantage, they end up getting consumption larger than their initial production possibilities frontier.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.