The advantage of trade,both for individuals and countries
A) always nets out to zero.
B) disappears when one has an absolute advantage over the other.
C) is that trade permits specialization and specialization increases output.
D) is increased when tariffs are imposed.
E) can benefit only one party in the transaction.

Question

Quizplus · Accepted Answer

The advantage of trade is that it allows countries and individuals to specialize in the production of goods and services in which they have a comparative advantage, leading to an increase in overall output and efficiency. This is known as the principle of comparative advantage. Therefore, option C is the correct choice. Option A, B, and E are incorrect because they are not true. Option D is incorrect because tariffs can lead to reduced trade and less advantage for both parties involved.

The Advantage of Trade,both for Individuals and Countries