Specialization and trade allow a country to
A) produce and consume on its production possibility frontier.
B) produce and consume inside its production possibility frontier.
C) produce and consume outside its production possibility frontier.
D) produce on its production possibility frontier and consume outside it.

Question

Quizplus · Accepted Answer

Specialization and trade enable a country to focus on producing goods in which it has a comparative advantage and trade for other goods. This allows the country to consume at a point that is outside its production possibility frontier (PPF), which represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Specialization and Trade Allow a Country to