International trade based on comparative advantage allows a country to produce outside its production possibility frontier.

Question

Quizplus · Accepted Answer

International trade based on comparative advantage allows a country to consume outside its production possibility frontier, not produce outside it. The production possibility frontier represents the maximum output combinations that an economy can achieve given its resources and technology; trade allows for consumption beyond these limits by enabling countries to specialize according to their comparative advantages and exchange goods and services.

International Trade Based on Comparative Advantage Allows a Country to Produce