Final answer:
International trade is crucial for smaller countries that have limited domestic markets but larger production capacities, enabling them to utilize economies of scale and benefit from a variety of products and competition in the global market.
Step-by-step explanation:
The question addresses the importance of international trade and its benefits for different sizes of countries. It highlights how smaller home markets and larger production capacities favor internationalization due to economies of scale. International trade allows smaller economies like the United Kingdom or Belgium to not only optimize production capacities but also provide consumers with a variety of products and competitive prices from global markets. The lack of international trade would limit consumer choice and hinder competition, while the presence of international trade encourages innovation and improves quality as car manufacturers from different countries compete in a global marketplace. Dynamic comparative advantage also comes into play, where different countries specialize in producing different goods and services efficiently, further strengthening the case for international trade.