Which of the following is possible with international trade?
I. Countries that engage in trade can consume at a point outside their respective production
Possibilities curves.
II. Global production will be increased.
III. World resources will be used more efficiently.
A) I, II, and III
B) I and II only
C) I and III only
D) II and III only

Question

Quizplus · Accepted Answer

All three statements are correct. Through international trade, countries can specialize in producing goods and services that they have a comparative advantage in and consume goods and services that they would have otherwise not been able to produce efficiently. This leads to a consumption point outside their respective production possibilities curves. Increased production and more efficient use of world resources are also possible with international trade, as countries can take advantage of their strengths and trade with other countries for their weaknesses.

Which of the Following Is Possible with International Trade