Question:The
possibility for gains trade is due to the fact that different
countries face different resource...
Question
The
possibility for gains trade is due to the fact that different
countries face different resource...
The
possibility for gains trade is due to the fact that different
countries face different resource endowments, production cost and
geographical locations.
Interpreted and explain with examples
- this is an essay question so please format in paragraph
form
DIfferent countries have some attributes that make production
of certain good or service harder or easier and these attributes
are unique.
Each country has unique production cost,resource endowment and
geographical location that results in more or less production of
some goods. Countries export those products that they are able to
produce because it helps the country to make money for economy of
that country.
Unique geographical locations means different resource
endowments which also means different cost of production for
certain products. All of these factors combine for creating trade
gains.