A variety of factors can make trade beneficial. An example of a benefit of trade is that the marginal utility ratios for products differ between different countries. Into which category does this example fit?

Question

Quizplus · Accepted Answer

This example fits into the category of "Differences in demand" because the differing marginal utility ratios for products between countries indicate variations in demand preferences, which can drive trade as countries seek to obtain goods that are more valued domestically from places where they are less valued, thus benefiting from the trade.

A Variety of Factors Can Make Trade Beneficial