Final answer:
The correct answer to the student's question is voluntary trade, which is synonymous with mutually beneficial trade. Voluntary trade allows for significant benefits such as economies of scale and increased product variety, while acknowledging the nuanced effects of international trade on domestic job markets.
Step-by-step explanation:
Mutually beneficial trade refers to situations where all parties involved in the trade benefit from the exchange. This concept is commonly known as voluntary trade. It is built on the principle that each party values what they are receiving more than what they are giving away. This type of trade can be particularly advantageous for small economies, allowing them to take full advantage of economies of scale, increase competition, and enjoy a wider variety of products offered by different producers. While international trade can create winners and losers within a country, trade should not be reflexively inhibited to prevent potential job losses. Historically, as noted by Benjamin Franklin, trade has generally promoted economic growth and prosperity. Despite the challenges, the overall benefits of international trade typically outweigh the costs, and many economies have thrived by engaging in global trade.