When two countries specialize and trade with one another:
A)total production remains unchanged,but consumption rises.
B)total production increases,but only if comparative advantage exists.
C)total production may increase,depending on trade relations.
D)total production and consumption remain unchanged.

Question

Quizplus · Accepted Answer

Specialization and trade allow countries to focus on producing the goods or services that they are most efficient at producing, leading to increased total production. This concept is known as comparative advantage. As a result of specialization and trade, each country can consume a greater variety of goods and services than they could produce on their own, leading to an increase in consumption. Therefore, Option B is the correct choice.

When Two Countries Specialize and Trade with One Another