Trade can make everybody better off because it

Question

a. allows people to specialize according to comparative advantage.
b. reduces competition among domestic companies.
c. increases cooperation among nations.
d. requires some workers in an economy to be retrained.

Answer 1

The correct answer is:

a. allows people to specialize according to comparative advantage.

Trade enables countries and individuals to specialize in the production of goods and services for which they have a comparative advantage, leading to more efficient allocation of resources and increased overall production. This specialization can make all parties better off through trade.