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When a nation requires fewer resources than another nation (potential trade partner) to produce a given...

When a nation requires fewer resources than another nation (potential trade partner) to produce a given product, it means:

a. The nation is more developed than the country with whom it intends to trade.

b. The nation is trying to help the other country by sacrificing its own interest.

c. The nation is helping its citizens.

d. The nation is helping its citizens at the cost of the citizens of the country with whom it is trading.

e. None of the above is correct.

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Answer #1

Correct option is (e).

When a nation requires fewer resources than another nation to produce the same product, it means that nation can produce more quantity of the product using the same resource as the other nation. So the nation in question has a comparative advantage in producing that product and it will benefit from trade if it specializes in and exports that product to the other nation.

Correct option is (e).

When a nation requires fewer resources than another nation to produce the same product, it means that nation can produce more quantity of the product using the same resource as the other nation. So the nation in question has a comparative advantage in producing that product and it will benefit from trade if it specializes in and exports that product to the other nation.

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