Which of the following is correct? Trade
A)Trade allows a person to consume at a point outside his production possibilities frontier.
B)Trade limits a person's ability to produce goods and services on her own.
C)Trade must benefit both traders equally.
D)Trade is based on absolute advantage.

Question

Quizplus · Accepted Answer

Trade allows individuals or countries to specialize in producing goods or services in which they have a comparative advantage, and exchange them with others who have a comparative advantage in producing other goods or services. This enables them to consume at a point outside their production possibilities frontier.

Which of the Following Is Correct? Trade