Question

Mutual gains from voluntary trade require differences in Select one:

A. absolute advantage.
B. external costs.
C. implicit costs.
D. comparative advantage.
E. depreciation costs.

Answer 1

Mutual gains from voluntary trade require differences in comparative advantage.

Step-by-step explanation:

Mutual gains from voluntary trade require differences in comparative advantage. Comparative advantage occurs when one country has a lower opportunity cost of producing a specific good or service compared to another country. This means that each country can specialize in producing the goods or services for which they have a comparative advantage and then trade with each other, leading to mutual benefits.