The nation of Spritzland used to prohibit international trade, but now trade is allowed, and Spritzland is exporting wristwatches. Relative to the previous no-trade situation, total surplus in the market for wristwatches in Spritzland has increased.

Question

Quizplus · Accepted Answer

Allowing international trade and exporting wristwatches would increase total surplus in Spritzland's market for wristwatches by opening up new markets, increasing sales, and enabling the country to specialize in the production of goods for which it has a comparative advantage, thus improving efficiency and gains from trade.

The Nation of Spritzland Used to Prohibit International Trade, but Now