Country X exports agricultural commodities to country Y and country Y exports industrial goods to country X.
Given that the pattern of trade between X and Y can be explained by the theory of comparative advantage, what can be concluded from this?
1 )
Both countries derive an equal benefit from engaging in trade.
2 )
Country X has more fertile agricultural land than country Y.
3 )
Neither country has an absolute advantage in the production of both sets of goods.
The opportunity cost of producing agricultural commodities is greater in Y than in X.
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