The gains from trade include
i) lower prices from competition.
Ii) greater output from specialisation.
Iii) greater variety of goods and services available.
A) i, ii and iii
B) i and ii only
C) ii only
D) i and iii only
E) ii and iii only

Question

The gains from trade include 
i) lower prices from competition.
Ii) greater output from specialisation.
Iii) greater variety of goods and services available.
A) i, ii and iii
B) i and ii only
C) ii only
D) i and iii only
E) ii and iii only

Quizplus · Accepted Answer

All three options - lower prices from competition, greater output from specialization, and greater variety of goods and services available - are gains from trade. These gains occur because countries can specialize in producing goods and services in which they have a comparative advantage, and then trade with other countries to obtain the goods and services they cannot produce efficiently themselves. This leads to increased efficiency, lower costs, and more choices for consumers.

The Gains from Trade Include