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AssignmentMultiple Choice

International Trade

Question 1 • $2526: Full: 2102320: Economics HONORS: NEW CREDIT

Which option best explains why countries trade with each other?

Answer
A
to eliminate scarce resources
B
to eliminate excess resources
C
to sell goods they cannot produce locally
D
to obtain goods they cannot produce efficiently

Explanation

Countries trade to specialize in producing goods they can make relatively efficiently and exchange them for other goods. This lets each country obtain products it cannot produce as efficiently itself. Choice C is too narrow because countries may be able to produce a good locally, but still trade for it more efficiently.

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