When nations specialize in their areas of comparative advantage and then trade with the rest of the world, the result is that
A) the average standard of living in the world will go down.
B) the average standard of living in the world will go up.
C) the world will move from a point on the production possibilities curve to a point inside the curve.
D) worldwide economic efficiency will decrease.

Question

Quizplus · Accepted Answer

When nations specialize in their areas of comparative advantage and engage in international trade, it leads to increased economic efficiency and an expansion in overall production possibilities, leading to increased output and higher standards of living. Therefore, the average standard of living in the world will go up.

When Nations Specialize in Their Areas of Comparative Advantage and Then