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Q. Now, consider that the relative price of A is actually not higher than Albania's autarkic level of 1, but quite the opposite (e.g. PA/PB = 0.5). Could Albania still be able to gain from trade? If so, where could be its production point? Given the information in this question, where is Albania's comparative advantage?
Answer: Yes as long as the world's terms of trade differed from those of Albania that country stands to increase from international trade. In this particular case its aim of production with trade would be at point c.
Using examples, from the government, illustrate the significant opportunity cost.
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Are tariffs harmful are necessary to maintain fair trade?
haberler`s theory of neoclassical theory of trade
opportunity cost version is an improvement over the classical theory of international trade?comment
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