Suppose that a country that has a high average wage level agrees to trade with a country that has a low average wage level.Which country can benefit?
A)only the one with a low level of output per person.
B)only the one with a high level of output per person.
C)both
D)neither

Question

Quizplus · Accepted Answer

Both countries can benefit from trade, even if one has a higher average wage level than the other. In this situation, the country with the high average wage level may have a comparative advantage in producing certain goods, while the country with the low average wage level may have a comparative advantage in producing other goods. By specializing in the goods in which they have a comparative advantage and trading with each other, both countries can increase their overall level of economic output and benefit from the gains from trade. Additionally, trade can lead to increased efficiency and productivity in both countries, which can ultimately lead to higher wages for workers in both countries.

Suppose That a Country That Has a High Average Wage