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AP Macroeconomics/Unit 1: Basic Economic Concepts
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Comparative Advantage and Gains From Trade
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Country A can produce 100 units of food or 50 units of clothing with its resources. Country B can produce 60 units of food or 40 units of clothing. If they specialize according to comparative advantage and trade, what is the maximum potential combined production increase compared to each producing both goods without trade?

A

No increase is possible

B

10 units of both food and clothing

C

20 units of food only

D

15 units of clothing only

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