A nation will gain from trade if it:
A) produces and consumes along its PPF.
B) produces outside its PPF and consumes along its PPF.
C) consumes outside its PPF and produces along its PPF.
D) produces and consumes outside its PPF.

Question

Quizplus · Accepted Answer

A nation gains from trade by consuming more than it can produce on its own, which is possible by specializing in the production of goods for which it has a comparative advantage and then trading for other goods. This allows it to consume outside its Production Possibility Frontier (PPF) while producing along its PPF.

A Nation Will Gain from Trade If It