Illustrate and Explain, for Each Statement Below, Why the Statement

Essay

Illustrate and explain, for each statement below, why the statement is either TRUE or False. Assume a two-commodity world in each case.
(a) "If a country has an absolutely fixed production pattern, i.e., resources used
in each industry are completely specific to their respective industry, then this
country cannot experience any welfare gain when moving from autarky to free
trade."
(b) "It is possible that, even if two countries have identical production-
possibilities frontiers, trade between the countries can enhance the well-being
of each country, in comparison with well-being under autarky."