Trade can make everybody better off because it:
A) leads to interdependence
B) increases labour costs
C) reduces absolute costs of production
D) allows people to specialise according to comparative advantage

Question

Quizplus · Accepted Answer

Trade allows countries to specialize in producing the goods in which they have a comparative advantage, meaning they can produce at a lower opportunity cost than other countries. This leads to more efficient production and reduces the absolute cost of production, making goods cheaper for consumers. As a result, trade can benefit all countries involved by allowing them to focus on their strengths and producing more goods at a lower cost.

Trade Can Make Everybody Better Off Because It