Which of the following is possible with international trade?
I. Countries that engage in trade can consume at a point outside their respective production possibilities curves.
II. Global production will be increased.
III. World resources will be used more efficiently.

Question

Which of the following is possible with international trade? 
I. Countries that engage in trade can consume at a point outside their respective production possibilities curves.
II. Global production will be increased.
III. World resources will be used more efficiently.

Quizplus · Accepted Answer

International trade allows countries to specialize in producing goods that they have a comparative advantage in, which leads to greater efficiency in the use of resources and an increase in global production. As a result, countries are able to consume at a point outside their respective production possibilities curves, which means that they can enjoy a higher standard of living than they would without trade. Therefore, all three statements are possible with international trade.

Which of the Following Is Possible with International Trade