What is a primary reason a country specializes and trades with others?

What is a primary reason a country specializes and trades with others?

• A. To Obtain Goods That Are Not Efficiently Produced Domestically
• B. To Eliminate All Trade Barriers
• C. To Produce Every Possible Good Domestically
• D. To Guarantee Identical Wages Worldwide

Answer: (A)

Specialization and trade happen because different countries have different relative efficiencies, so each country can produce some goods at a lower opportunity cost than others. By focusing on goods they produce relatively well and trading for others, countries can consume more than they could if they tried to produce everything themselves. That’s why the main reason is to obtain goods that are not efficiently produced domestically. The other ideas don’t explain the motive: removing trade barriers isn’t why countries trade, producing every good domestically is inefficient, and trade doesn’t guarantee identical wages worldwide.

Specialization and trade happen because different countries have different relative efficiencies, so each country can produce some goods at a lower opportunity cost than others. By focusing on goods they produce relatively well and trading for others, countries can consume more than they could if they tried to produce everything themselves. That’s why the main reason is to obtain goods that are not efficiently produced domestically. The other ideas don’t explain the motive: removing trade barriers isn’t why countries trade, producing every good domestically is inefficient, and trade doesn’t guarantee identical wages worldwide.