What is the fundamental basis for trade among nations?

Question

Quizplus · Accepted Answer

The fundamental basis for trade among nations is comparative advantage. This principle suggests that even if one country is more efficient in producing all goods (absolute advantage) compared to another, there can still be benefits from trade if each country specializes in producing the goods for which it has a comparative advantage (i.e., the goods it can produce at a lower opportunity cost than other countries). This allows all countries to enjoy a greater variety of goods and services at lower prices.

What Is the Fundamental Basis for Trade Among Nations