Question

True or false: without engaging in international trade, freedonia and sylvania would not have been able to consume at the after-trade consumption bundles. (hint: base this question on the answers you previously entered on this page.)

Answer 1

It is true that without international trade, Freedonia and Sylvania would not have been able to consume at the after-trade consumption bundles. International trade permits countries to achieve economies of scale, improve efficiency, and benefit from a greater variety of goods, which ultimately leads to a higher standard of living, as demonstrated by many successful global economies.

Step-by-step explanation:

The question seeks to ascertain the impact of international trade on the consumption possibilities of two countries, Freedonia and Sylvania. Based on historical evidence and the success of different economies that have engaged in international trade, it is true that without engaging in international trade, Freedonia and Sylvania would not have been able to consume at the after-trade consumption bundles. International trade allows countries to exceed their production possibilities frontier (PPF) by specializing according to their comparative advantage and trading the surplus for other goods and services they need but did not produce. Thus, international trade leads to enhanced efficiency, greater variety of goods for consumers, and the potential for economies of scale for producers.

Instances such as the North American Free Trade Agreement (NAFTA), and the rise of economies like Japan, China, and the East Asian Tiger economies, are clear indicators that trade liberalization and participation in global markets foster economic development and higher standards of living. Smaller economies, in particular, stand to benefit significantly as they are unlikely to achieve high standards of living in isolation from the global market. This demonstrates the essential role of international trade in economic success and consumption capabilities.

Answer 2

The correct answer is True.

Without engaging in international trade, any quantity outside a country's original PPF is considered infeasible. In other words, given an individual country's resources, the bundles on the PPF are the greatest quantities of the goods that a country can produce (and, therefore, consume) without trade. By exploiting each country's comparative advantage to realize gains from trade, Maldonia and Lamponia can actually consume outside their individual PPFs through specialization.