With trade, a country will maximize its satisfaction when it
A) moves to the highest possible indifference curve.
B) forces the marginal rate of substitution to its lowest possible value.
C) consumes more of both goods than it does in autarky.
D) finds its marginal rate of substitution exceeding its marginal rate of transformation.

Question

Quizplus · Accepted Answer

With trade, a country can consume outside its PPF, and therefore can move to a higher level of satisfaction by moving to the highest possible indifference curve.

With Trade, a Country Will Maximize Its Satisfaction When It