Question

When mateo and sophia produce efficiently and make a mutually beneficial trade based on comparative advantage, what is the result?

1) Increased production for both Mateo and Sophia
2) Decreased production for both Mateo and Sophia
3) No change in production for Mateo and Sophia
4) Cannot be determined

Answer 1

When Mateo and Sophia make a mutually beneficial trade based on comparative advantage, the result is increased production for both Mateo and Sophia.

Step-by-step explanation:

When Mateo and Sophia produce efficiently and make a mutually beneficial trade based on comparative advantage, the result is increased production for both Mateo and Sophia. This is because when each country specializes in producing the goods that they have a comparative advantage in, they can produce more of those goods than they could if they were trying to produce everything themselves. By trading, they can both benefit from each other's specialized production and increase their overall production.