Opening trade between nations enables each nation's consumption possibilities to go beyond the confines of its own production possibilities curve.

Question

Quizplus · Accepted Answer

Opening trade allows countries to specialize in producing what they are relatively better at producing, and import goods in which they have a comparative disadvantage. This increases the overall efficiency of the global economy, and allows each nation to consume goods beyond what it can produce on its own. Thus, trade enables each nation's consumption possibilities to go beyond the confines of its own production possibilities curve.

Opening Trade Between Nations Enables Each Nation's Consumption Possibilities to Go