When countries specialize based on their comparative advantage and trade with each other, how does it lead to gains from trade for both countries (even if one country has an absolute advantage in both goods)?

According to the theory of comparative advantage, countries gain from trade because Group of answer choices World output can rise when each country specializes in what its does relatively best. All firms can take advantage of cheap labor. Output per worker in each firm increases. Every country has an absolute advantage in producing something. Trade makes firms behave more competitively, reducing their market power

When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Candonia and Lamponia. Both countries produce grain and sugar, each initially (i.e., before specialization and trade) producing 24 million pounds of grain and 12 million pounds of sugar, as indicated by the grey stars marked with the letter A. SUGAR (Millions of pounds) 64 56 48 PPF 40 32 24 16 8 0 0 8 Candonia 16 24 32 40 48 GRAIN (Millions of pounds) 56 64 (?) SUGAR (Millions of pounds) 64 56 48 40 32 24 16 8 0 PPF ———— 0 8 Lamponia A 16 24 32 40 48 GRAIN (Millions of pounds) 56 64 ? Candonia has a comparative advantage in the production of sugar while Lamponia has a comparative advantage in the grain production of ▼ . Suppose that Candonia and Lamponia…

The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage, Group of answer choices only the production of both goods will increase. the production and consumption of both goods will increase. only the consumption of both goods will increase. only the production of wheat will increase.