Which of the following is possible with international trade?
I.Countries that engage in trade can consume at a point outside their respective production
Possibilities curve.
II.Global production will be increased.
III.World resources will be used more efficiently.

Question

Quizplus · Accepted Answer

All three statements are possible with international trade. By specializing in producing goods that they have a comparative advantage in, countries can consume at a point outside their production possibilities curve. Global production will also increase as countries can focus on producing goods they are relatively efficient in, and trade with others for goods they are less efficient in producing. This leads to a more efficient use of world resources as countries can specialize in the goods they are most efficient in, leading to overall lower production costs and better global allocation of resources.

Which of the Following Is Possible with International Trade