Specialization and trade make a country better off because with trade,the country can consume at a point
A) outside its production possibilities frontier.
B) inside its production possibilities frontier.
C) on its production possibilities frontier.
D) on its trading partner's production possibilities frontier.
E) inside its trading partner's production possibilities frontier.

Question

Quizplus · Accepted Answer

Specialization allows a country to produce more of a good that it has a comparative advantage in, while trading allows the country to consume a combination of goods that is outside its own production possibilities frontier. This is because it can obtain goods that it cannot produce domestically from its trading partners, and thus consume a combination of goods that it could not produce on its own.

Specialization and Trade Make a Country Better Off Because with Trade,the