Question

What will happen when two countries trade based on comparative advantage?

(1 point)
A.
Each country will gain from international trade.
B.
Each country will lose from international trade.
C.
Each country will consume less of all the goods it can produce.
D.
Each country will produce more of all the goods it can produce.

Answer 1

Explanation: Trade between two agents or countries allows the countries to enjoy a higher total output and level of consumption than what would have been possible domestically. ... Comparative advantage and opportunity costs determine the terms of trade for exchange under which mutually beneficial trade can occur.