If nations begin to specialize in production for the purpose of trade,
A)the utility from consumption will increase, but not the total output.
B)total world output will increase, as well as well-being from consumption.
C)total world output will increase, but well-being from consumption will not.
D)neither total output nor well-being from consumption will change.
E)the impact on total output and well-being cannot be predicted.

Question

Quizplus · Accepted Answer

When nations specialize in production for the purpose of trade, they can take advantage of their comparative advantage and produce goods more efficiently. This leads to an increase in total world output, as well as well-being from consumption, because consumers can get goods at lower prices and have greater variety to choose from.

If Nations Begin to Specialize in Production for the Purpose