Nations can gain from trade with other nations even if they are less productive in all industries than the nations they trade with.

Question

Quizplus · Accepted Answer

This statement is based on the principle of comparative advantage, where nations specialize in industries where they have a lower opportunity cost and trade with other nations for goods and services they cannot produce efficiently. This allows nations to benefit from the gains of trade and improve their overall welfare, even if they are less productive in all industries than their trade partners.

Nations Can Gain from Trade with Other Nations Even If