If the residents of a country specialize in a good in which they have a comparative advantage and trade with residents in another nation, the residents in the first country
A)can consume more than they could without trade.
B)can produce more than they could without trade.
C)will have a lower standard of living.
D)will be exploited by the second nation.

Question

Quizplus · Accepted Answer

By specializing in a good in which they have a comparative advantage and engaging in trade, the residents of a country can consume more than they could without trade. This is because they can obtain the goods they do not produce efficiently from other countries, thus expanding the range of goods available to them. As a result, the overall standard of living in the country will increase. Therefore, option A is the correct answer.

If the Residents of a Country Specialize in a Good