What is gained when people engage in specialization and trade?
A) Specialization and trade allow people to consume outside their individual production possibilities frontiers.
B) Specialization and trade allow people to consume inside their production possibilities frontiers.
C) Specialization and trade allow people to consume at a point on their production possibilities frontiers.
D) Specialization and trade allow people to produce outside their individual production possibilities frontiers.
E) There are no gains from specialization and trade.

Question

Quizplus · Accepted Answer

Specialization and trade allow people to specialize in producing what they are good at and then trade with others to get the goods and services that they need but cannot produce efficiently themselves. This leads to an increase in overall productivity and output, allowing people to consume more goods and services than they could have produced on their own. Specialization and trade allow people to consume outside their individual production possibilities frontiers, as they can access goods and services that they could not have produced efficiently on their own.

What Is Gained When People Engage in Specialization and Trade