Question

What are five foundations of economics? increasing trade between two countries makes everyone in those countries better off.

Answer 1

The five foundations of trade are:

• incentives
• tradeoffs
• opportunity cost
• marginal thinking,
• principle that trade creates value.

Why do we engage in trade?

There are five main foundations of trade that are the reason why people engage in trade. One of them is the profit incentive to make money from trade. Another is the tradeoffs that people are forced to make to survive.

Opportunity cost also leads to trade because people give up one thing for another and so may have to sell the thing they gave up to receive the thing they want. There is also the principle which posits that when we trade, value is created. Finally, there is marginal thinking which is thinking along the lines of the benefit of one additional unit.

Find out more on the foundations of trade at brainly.com/question/2710473

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