Specialization and trade
A) does not benefit anyone.
B) allows nations to produce inside their individual production possibilities frontier.
C) allows nations to consume combinations of products that are outside their individual production possibilities frontier.
D) shifts the production possibilities frontier inward.
E) shifts the production possibilities frontier outward.

Question

Quizplus · Accepted Answer

Specialization and trade allow nations to consume combinations of products that are outside their individual production possibilities frontier. This is because each nation can specialize in producing the goods and services they have a comparative advantage in, and then trade with other nations for the goods and services they cannot efficiently produce themselves. This leads to increased efficiency and a wider range of goods and services available for consumption, beyond what could be produced within a nation's production possibilities frontier.

Specialization and Trade