ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What happens when two parties willingly trade with each other?
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both parties disappear
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both parties end up better than they were before
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neither party end up better than they were before
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one party does very well, and the other doesn’t
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Explanation:
Detailed explanation-1: -It is correct because when countries furnish a trading relationship with each other, it increases the level of output of countries. The importing country obtains goods at a low price than their production cost, and the exporting country increases its efficiency to produce enough to export to other countries.
Detailed explanation-2: -They can produce the same units of output by using fewer inputs. So, it can be inferred that the given firm is experiencing an absolute advantage.
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