Upgrade to access all content for this subject
Assume two countries, United States and Canada, produce only two goods.
If the production possibilities curves for both countries is curved outward away from the axis, then this means
both countries are experiencing constant opportunity costs.
both countries experience different mixes of resources and technological advances.
neither country will have an absolute advantage in the production on a good.
the United States will have a comparative advantage because the population is greater.
Canada will have a comparative advantage in the production of land-intensive goods.