Which of the following statements is true?
A)There are no gains from trade between people in different countries because, with international trade, it's the countries that trade, and not its people, that realize the gains.
B)Trade between people in different countries cannot occur.
C)Trade between people in different countries can occur, but it will not result in an increase in consumer satisfaction.
D)Trade between people in different countries can occur, but it will not lead them to better utilize their comparative advantage.
E)Trade between people in different countries can occur, and the gains that occur are the same as the gains from trade within a country.

Question

Quizplus · Accepted Answer

Trade between people in different countries can occur, and the gains that occur are the same as the gains from trade within a country. This is because with international trade, people can specialize in producing the goods and services that they can produce at a lower opportunity cost and trade with others who can produce goods and services at a higher opportunity cost. This allows for a more efficient allocation of resources and increases total output, leading to gains from trade.

Which of the Following Statements Is True