What is the basis for international trade?

Question

Quizplus · Accepted Answer

International trade is based on the principle of comparative advantage, which means that countries specialize in producing goods or services that they can produce more efficiently than other countries and trade with other countries for goods or services that they cannot produce efficiently. This leads to increased efficiency and lower costs, benefiting all countries involved in the trade. Established trade patterns and shipping costs may influence the direction and volume of trade, but do not form the basis of international trade. Absolute advantage is a concept where a country is able to produce all goods more efficiently than other countries, which is rare in reality.

What Is the Basis for International Trade