Question Solved1 Answer For two people who are planning to trade two different goods, when will there NOT be a comparative advantage for either? if they have exactly the same opportunity cost if they have agreed in advance on who will produce what and how much each will produce if the terms of trade are such that neither can gain from trade if one person has an absolute advantage in both products

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Transcribed Image Text: For two people who are planning to trade two different goods, when will there NOT be a comparative advantage for either? if they have exactly the same opportunity cost if they have agreed in advance on who will produce what and how much each will produce if the terms of trade are such that neither can gain from trade if one person has an absolute advantage in both products
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Transcribed Image Text: For two people who are planning to trade two different goods, when will there NOT be a comparative advantage for either? if they have exactly the same opportunity cost if they have agreed in advance on who will produce what and how much each will produce if the terms of trade are such that neither can gain from trade if one person has an absolute advantage in both products
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  Comparative advantage is the ability of a person or nation to produce a good at lower opportunity cost than the other. For example if A and B planning to trade with each other. Both person produce wheat and rice. Opportunity cost of producing wheat for A is $2/kg and that of B is $1/kg. Similarly the opportunity cost of producing rice for the person A is $1.5/kg and that of person B is $3/kg. Here A has a lower opportunity cost in the production of Rice than B and B has lower opportunity cost in the prod ... See the full answer