If there is no trade, which of the following is most likely?
A) A country is better off because it will become self-sufficient.
B) A country's production possibilities frontier is also its consumption possibilities frontier.
C) A country can still benefit from international specialization.
D) A country has more product variety available.

Question

Quizplus · Accepted Answer

If there is no trade, a country's production possibilities frontier would be its consumption possibilities frontier because it would not be able to consume goods that it does not produce. Therefore, choice B is the most likely. A is incorrect because self-sufficiency can lead to inefficiencies and higher costs. C is incorrect because international specialization requires trade. D is also incorrect because trade allows for access to a greater variety of goods.

If There Is No Trade, Which of the Following Is