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Britain United States 100 90 200 Dr. Ibrahim Abou-Saad Assume the world consists hypothetically of only two countries that can produce only two products, in

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Britain United States 100 90 200 Dr. Ibrahim Abou-Saad Assume the world consists hypothetically of only two countries that can produce only two products, in the same period, with the same fixed amount of resources, with the same highest technologies available worldwide, and with the simplified assumption of producing "along" a linear production possibility frontier (PPF). Figure 3 provides the production possibilities frontiers between Textiles (T) and Soybeans (S) in the United States (A) and Britain (B). Referring to Figure 3, which of the following is true according to David Ricardo's Comparative Advantage Theory? Only Britain can benefit from engaging in free international trade with the United States. Both Britain and the United States can benefit from engaging in free international trade. Neither Britain nor the United States can benefit from engaging in free international trade. ONone of the above

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