Country A has an absolute advantage over Country B in the production of both soybeans and corn. Explain a scenario in which both countries would benefit if Country A specialized in soybeans and Country B specialized in corn. (5 points)



Answer :

Final answer:

Country A specializes in soybeans, and Country B specializes in corn, benefiting both through trade.


Explanation:

Country A has an absolute advantage in the production of both soybeans and corn compared to Country B. If Country A specializes in producing soybeans while Country B specializes in producing corn, both countries can benefit through trade. For example, Country A can export their excess soybeans to Country B in exchange for corn, ensuring that each country focuses on what they are best at and maximizing overall production efficiency.


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