The figure below shows Arcticland's annual production possibilities boundary for the production of fish and ice.
FIGURE 33- 4
-The increases in a nation's output and consumption that result from specialization and trade are called

Question

The figure below shows Arcticland's annual production possibilities boundary for the production of fish and ice.
  FIGURE 33- 4
-The increases in a nation's output and consumption that result from specialization and trade are called

Quizplus · Accepted Answer

The gains from trade refer to the benefits a nation can derive from specializing in the production of goods where it has a comparative advantage, and trading with other nations for goods that it may have a higher opportunity cost in producing. This leads to an increase in output and consumption for both nations, resulting in mutual benefits. Therefore, C is the correct choice.

The Figure Below Shows Arcticland's Annual Production Possibilities Boundary for the Production