Question

The law of comparative advantage suggests thata.both countries would gain if Botswana traded wheat grown in Botswana for Qatar's wine.b.Qatar would not gain from trade because it has an absolute advantage in producing both goods.c.neither country would gain from trade, even if the costs for transporting the products were zero.d.both countries would gain if Botswana traded wine made in Botswana for Qatar's wheat.

Answer 1

Answer:

A)both countries would gain if Botswana traded wheat grown in Botswana for Qatar's wine.

Explanation:

The law of comparative advantage can be regarded as one set up by David Ricardo in the year 1817, which gives reason that is behind international trade that exist between different countries , even the business, workers as well as factories of a country have efficiency at production of every single good compare to other country.

Comparative advantage shows the ability of an economy have in production of a particular good/ service having lower opportunity cost compare to its trading partners.