Trading partners should specialize in producing goods in accordance with comparative advantage,then trade and diversify in consumption because
A) out-of-pocket costs of production decline
B) free trade areas protect infant industries
C) economies of scale are present
D) manufacturers face diminishing returns
E) more goods are available for consumption

Question

Quizplus · Accepted Answer

Specializing according to comparative advantage and then trading allows countries to consume more than they would in isolation because they can obtain goods they do not produce more efficiently from others. This leads to a greater variety of goods available for consumption.

Trading Partners Should Specialize in Producing Goods in Accordance with Comparative