Question

By comparing opportunity costs and gains from trade for two parties each making the same two goods, one can determine the exact exchange ratio at which the parties should agree to trade.A. TrueB. False

Answer 1

Answer:

False

Explanation:

Opportunity cost is entirely a different process which helps to determine the cost someone is willing to bear. By comparing opportunity cost gains from the trade it is not possible to get the exact exchange ratio because opportunity cost just measures the range of options someone can take. Those options can lead to benefit for both the parties.