Question

2) explain how the U.S. can gain in trade even though it has an absolute advantage in both shoes and refrigerators. ( Your answer should include whether more product is available via specialization.)

Answer 1

The United States could gain in the trade-off between Mexico and the United States for exchange in refrigerator and shoes because the United State has better opportunity cost if it would put more work into producing refrigerators would be less expensive in united states, and fewer workers producing shoes because it would be more expensive to produces more than Mexico. Both countries would benefit best is to specialization in specific products and trade-off among each other for more economic gains.