If Brazil voluntarily ships coffee to the United States in return for airplanes,

Question

Quizplus · Accepted Answer

Both Brazil and the United States will benefit from the trade since each nation can acquire items they need from the other country. Brazil can obtain airplanes which they may not produce, while the United States can get coffee which they may not grow. This allows each nation to satisfy their demands more efficiently and at a lower cost than they would have without trade. The fact that the trade does not increase the physical quantities of coffee and airplanes available is irrelevant since the gains from trade are based on comparative advantage and efficient resource allocation.

If Brazil Voluntarily Ships Coffee to the United States in Return