The basis for international trade is

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Quizplus · Accepted Answer

The basis for international trade is comparative advantage, which means that countries should specialize in producing goods where they have a lower opportunity cost and trade with countries that have a higher opportunity cost in producing those goods. This allows for both countries to benefit from trade and increase overall economic welfare. Established trade patterns, size of gold holdings, and shipping costs may influence international trade, but they are not the basis for it. Absolute advantage is not sufficient to explain international trade because even if one country can produce all goods at a lower cost than another country, both countries can still benefit from trade if they have different opportunity costs for producing those goods.

The Basis for International Trade Is