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Suppose that portugal and switzerland both produce beer and stained glass. portugal's opportunity cost of producing a pane of stained glass is 5 barrels of beer while switzerland's opportunity cost of producing a pane of stained glass is 10 barrels of beer. by comparing the opportunity cost of producing stained glass in the two countries, you can tell that has a comparative advantage in the production of stained glass and has a comparative advantage in the production of beer. suppose that portugal and switzerland consider trading stained glass and beer with each other. portugal can gain from specialization and trade as long as it receives more than of beer for each pane of stained glass it exports to switzerland. similarly, switzerland can gain from trade as long as it receives more than of stained glass for each barrel of beer it exports to portugal. based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of beer) would allow both switzerland and portugal to gain from trade? check all that apply.
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Suppose that portugal and switzerland both produce beer and stained glass. portugal's opportunity co...
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