Under what condition can two nations benefit from engaging in international trade?

Show Answers

When their production cost ratios differWhen their tariff levels varyWhen their price ratios are not the sameBoth differing cost ratios and price ratiosNone of the above

Explanation

Two countries can gain from trade if they have differences in production costs and price ratios. Variations in tariff rates alone do not guarantee mutual benefits. Therefore, both cost and price ratio differences are essential factors enabling gains from foreign trade.