Which of the following statements is TRUE about trade?

Question

Quizplus · Accepted Answer

Trade allows individuals and countries to specialize in the goods and services they are relatively better at producing, benefiting everyone involved. Even if someone is better at producing everything, trade allows them to focus on what they are best at and exchange the other goods with others who may have a comparative advantage in producing those goods. Thus, everyone can benefit from trade, including those who trade with foreign countries. Option B is correct but incomplete as the high opportunity cost of production of a product is the basis for determining comparative advantage. Option C is incorrect as specialization through trade allows an individual to focus on what they are relatively better at producing, thereby increasing productivity and efficiency. Option D is incorrect as trade can result in a net gain for both parties, leading to an upliftment of society's economy as a whole.

Which of the Following Statements Is TRUE About Trade