Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 3 - 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.
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