Trade makes people better off when:
A) everyone wants the same things as other people.
B) some people are less productive than others.
C) people cannot specialize in certain activities.
D) people have different preferences.

Question

Quizplus · Accepted Answer

Trade allows individuals to specialize in the production of goods and services that they are relatively better at producing, based on their skills, resources, and technology. This specialization results in greater efficiency, lower costs, and higher output, which leads to lower prices, higher income, and higher living standards. However, people have different preferences in terms of what they want or need, how much they are willing to pay or receive, and how they value different goods and services. Thus, trade allows individuals to exchange goods and services with others who have different preferences, and thereby, to satisfy their needs and wants more effectively and efficiently than they could alone.

Trade Makes People Better Off When