Which of the following statements is true?
A) A self-sufficient country can, at best, consume on its production possibilities frontier.
B) Only countries with an absolute advantage in the production of every good should strive to be self-sufficient.
C) A self-sufficient country consumes outside its production possibilities frontier.
D) Self-sufficiency is the road to prosperity for most countries.

Question

Quizplus · Accepted Answer

A self-sufficient country relies only on its own resources and production capabilities, which means that it can consume only what it produces. Therefore, it can at best consume on its production possibilities frontier, which represents the maximum amount of goods and services that can be produced with the available resources and technology. Choosing option B is incorrect because even if a country does not have an absolute advantage in producing all goods, it can still benefit from trade by specializing in the production of goods in which it has a comparative advantage. Option C is also incorrect because, as stated earlier, a self-sufficient country cannot consume outside its production possibilities frontier. Finally, option D is incorrect because history has shown that countries that embrace trade and specialization tend to achieve greater prosperity than those that are self-sufficient.

Which of the Following Statements Is True