Question

When countries specialize in producing certain goods and then freely exchange those goods for other goods with different countries, what is the advantage? Group of answer choices Each country can produce and consume at a point outside their production possibilities frontier. Each country can consume at a point outside their production possibilities frontier. All people in each country will be better off than they would be if they did not trade. Each country can produce at a point outside their production possibilities frontier.

Answer 1

Answer:

The correct answer is: Each country can consume at a point outside their production possibilities frontier.

Explanation:

A country is said to be specializing in the production of a good if it can produce the good at a lower opportunity cost. When countries produce the good they specialize in producing and trade with other countries. All the countries will be able to consume more.

The countries will produce on its production possibilities frontier at the intercept of the good they specialize in and consume at a point outside their production possibility frontier.