The difference between production possibilities curves with and without trade represents the

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The difference between production possibilities curves with and without trade represents the gains from trade. With trade, a country can specialize in producing the goods in which it has a comparative advantage and can then trade with other countries to obtain goods in which they have a comparative advantage. This leads to a shift outward in the production possibilities curve and an increase in overall output and welfare, which represents the gains from trade.

The Difference Between Production Possibilities Curves with and Without Trade