Question

If trade between nations is prohibited, a. nations will be unable to specialize in what they are good at and therefore end up consuming less. b. nations will more easily achieve specialization in production and end up consuming more. c. nations can refine their ability to allocate resources and therefore raise consumption. d. nations can increase their public welfare.

Answer 1

Answer:

a. nations will be unable to specialize in what they are good at and therefore end up consuming less

Explanation:

There is no country that can produce all goods and services efficiently (at the least cost ). It is for this reason that trade between countries becomes necessary. Trade between countries gives countries the opportunity to concentrate on the production of goods in which it is efficient in production and purchase goods for which it produces at higher costs.

If trade between nations is prohibited, countries would have to produce goods that they are both efficient and ijefficient in their production, resources would be wasted, specialisation in the production of goods would not occur and consumption would fall.

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