Two countries will have zero incentive to trade if their production-possibilities curves are parallel straight lines because:________

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04-08-2022
Social Studies

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Two countries will have zero incentive to trade if their production-possibilities curves are parallel straight lines because:________

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AnnuG AnnuG · Answer 1 · 2022-08-13T13:28:33-04:00

Two countries will have zero incentive to trade if their production-possibilities curves are parallel straight lines because the opportunity costs for both the countries is the same, and one country has complete advantage in the good's production, which is why no incentive is provided for that country's trade.

The term production possibility curve refers to the the graph where we see all the different combinations of output that can be produces using the present resources as well as technology.

Production possibility curve is also known as production possibilities frontier sometimes and they usually show tradeoffs as well as scarcity, through the graph.

To learn more about Production possibility curve, click

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