Question

Between any two countries trading two products, where each country has a comparative advantage in producing one of these two products, we know that the regulated trade is always better than the free trade.

a. True
b. False

Answer 1

False.

Step-by-step explanation:

In Economics, comparative advantage is referred to as the advantage of a country enjoyed by producing one of the two goods. In this case, the other country also entertains the comparative advantage by producing other products. However, it cannot be said that regulated trade is better than free-trade.