By specialization and trade, two individuals can

Question

Quizplus · Accepted Answer

When two individuals specialize in producing goods that they have a comparative advantage in and trade with each other, they are able to consume at a point beyond their individual production possibilities frontiers. This is because they are able to trade for goods that they cannot produce themselves at a lower opportunity cost than it would take for them to produce it themselves. As a result, they are able to consume more goods than they would have been able to produce on their own.

By Specialization and Trade, Two Individuals Can