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Which of the following is a true statement about the data for Twistia and Turnland? Both countries should specialize in bread, since each is more
Which of the following is a true statement about the data for Twistia and Turnland?
Both countries should specialize in bread, since each is more efficient in producing bread.
Twistia should specialize in pies and Turnland should specialize in bread.
The countries can benefit from trade if Twistia specializes in bread and trades for pies from Turnland. Turnland can benefit from trade but not Twistia, since Twistia has absolute advantage in both goods. Neither country can benefit from specialization and trade.
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