Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

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

Answer

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

Work Step by Step

Since the trade is mutually beneficial for both parties, that would mean each party would specialize in whichever field they were most efficient in using comparative advantage. Once they trade with eachother, they will be outside their 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.