The improvement in outcomes that occurs when specialized producers exchange goods and services is called:
A)the gains from trade.
B)absolute advantage.
C)comparative advantage.
D)specialization.

Question

Quizplus · Accepted Answer

The gains from trade refer to the increased overall benefits that arise from the exchange of goods and services among specialized producers who have comparative advantage in producing certain goods or services. By trading with one another, each producer benefits from being able to access goods or services produced more efficiently by other producers. This leads to a greater overall output of goods and services, and thus higher levels of economic prosperity.

The Improvement in Outcomes That Occurs When Specialized Producers Exchange