Question
Consider two countries: Alpha and Beta. Beta is willing to open its markets up to Alpha and is interested in becoming a trading partner. Assume
Consider two countries: Alpha and Beta. Beta is willing to open its markets up to Alpha and is interested in becoming a trading partner. Assume that Alpha has an absolute advantage in the production of both goods in a two good economy. Alpha also has a highly skilled labor force. In light of these observations, many Alphans are wary of outsourcing and believe they are better off producing all of their own products. Therefore many Alphans advocate for limiting trade with Beta. You are an economic advisor to the parliament of Alpha. What do you believe Alpha should do?
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