All of the options given are correct. Through trade, an economy can specialize in the production of fewer goods, allowing them to produce more efficiently and reach a higher production possibilities frontier. This can lead to increased welfare, as members of the economy can consume more of all goods by trading with others who specialize in different goods.

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With Trade

Question 17

Multiple Choice

With trade,

A) an economy can realize higher welfare.
B) an economy can specialize in the production of fewer goods.
C) an economy moves to a higher production possibilities frontier.
D) members of an economy can consume more of all goods.
E) All of the above are correct.

Correct Answer: