Question

To achieve the gains from trade, each nation should specialize in the production of a good or service if:

Answer 1

Answer:

the country can make the product using fewer resources than any other country

Explanation:

If a country can produce goods and services using fewer resources than others, it means its output will be cheaper compared to other countries. Producing using fewer resources is the same as producing at lower opportunity cost. A country manufactures more products using the same resources are the other nations.

Profiting from trade will require purchasing goods and services at the lowest price possible.  A country should export the products it produces at a lower price and import what other nations can manufacture using fewer resources.  For example, if country A can produce a product at $20 and country B produces the same product at $10. Country A will benefit by importing the product from B $10 than producing it.