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# When there aren't gains from trade

In a previous lesson we learned that there is the potential for two countries to gain from trade. But it is also possible that there might not be the potential to gain from trade. In this video, we explore the circumstance that would lead to there being no gains from trade.

## Want to join the conversation?

• I have a question! Is it possible that a country can have both comparative advantage?
• A country cannot have comparative advantage in both goods! That's the whole idea of "comparative". For example, I can be relatively better at baking brownies than at baking cookies, but I cannot at the same time be relatively better at baking cookies than baking brownies.
• At the same time, country A can produce more goods than country B, so A can sell it to B and still have more gain than B?
Do I get it right? Thank you
• How does the math work?
• I'm curious... What happens if a country had a lower opportunity cost in producing BOTH goods.
• Even if a country is better at producing both goods, trading can still be beneficial if it specializes in the good it's comparatively better at making.
(1 vote)
• At , Sal says that since they have the same slope, they have the same O.C. and therefore no comparative advantage. So I wonder, if you have two PPCs and they have different slopes, would their intersection point mean anything?
• Country A has the absolute advantage so for country B there will be some benefit of trading.. Imagine, country A does not need so many bananas, so it would be beneficial for country B to trade then..
(1 vote)
• Not true. Because their comparative OCs are the same, it just makes sense for them to split the production between apples and bananas. They can't get a better trade deal than their OC.
• I have a problem. I submitted an assignment recently and in it person A had an opportunity cost of producing 1 piece of firewood of 3 fishes. Person B had an opportunity cost of producing 1 piece of wood of 2 fishes. The question that was asked was "what is the maximum number of fishes person B will be willing to pay person A for one bundle of wood"

I reasoned that since the opportunity cost of producing 1f for person B was 1/2 *w, he would want to trade at a price greater than his opportunity cost because if he were to trade 2f for 1w he wouldn't be gaining anything but in fact would be wasting his time (and isn't time our most precious commodity)! So, the maximum he would want to trade his fish for would be 1f for 1 wood. The actual answer is 2 fishes for 1 wood. I just can't bring myself to agree with this. Can someone please help me out?