Two individuals or two nations benefit from trade only if it is impossible for each individual or nation to produce the good or service purchased from the other.

Question

Quizplus · Accepted Answer

This statement is incorrect. Two individuals or nations can still benefit from trade even if they both have the ability to produce the goods or services exchanged. This is because trade allows them to specialize in the goods or services they are relatively more efficient at producing, leading to increased efficiency and overall productivity.

Two Individuals or Two Nations Benefit from Trade Only If