In a two- product,two- country world,international trade can lead to increases in
A)prices of both goods in both countries.
B)consumer welfare only if output of both products is increased.
C)consumer welfare in both countries but not total production of both products.
D)total production of both products but not consumer welfare in both countries.
E)output of both products and consumer welfare in both countries.

Question

Quizplus · Accepted Answer

International trade allows countries to specialize in the production of goods where they have a comparative advantage, leading to increased total output and improved consumer welfare due to access to a greater variety of goods at lower prices.

In a Two- Product,two- Country World,international Trade Can Lead to Increases