A country will be able to consume a combination of goods that is NOT attainable solely from domestic production if
A)the country avoids international trade.
B)the world terms of trade differ from its domestic relative costs.
C)the country specializes in one product.
D)the world terms of trade equal the domestic relative costs.
E)the country's domestic production value equals world relative value.

Question

Quizplus · Accepted Answer

When the world terms of trade differ from a country's domestic relative costs, the country can benefit from trade by specializing in the production of goods for which it has a comparative advantage and trading for other goods, allowing it to consume beyond its domestic production possibilities.

A Country Will Be Able to Consume a Combination of Goods