Which of the following must be true in order to engage in advantageous international trade?
A)It must be producing at a point on its production possibilities frontier.
B)It must be economically efficient.
C)It must have a comparative advantage in producing one of the goods being traded.
D)There must be no potential Pareto improvements available in the economy.
E)It must have an absolute advantage in producing one good being traded.

Question

Quizplus · Accepted Answer

In order to engage in advantageous international trade, a country must have a comparative advantage in producing one of the goods being traded. This means that it can produce that good at a lower opportunity cost than another country. The other options listed may be desirable, but they are not necessarily required for advantageous trade.

Which of the Following Must Be True in Order to Engage