Complete the statement below.The benefits of specialisation and trade are based on    assumptions. If there are increased production costs, trade barriers or    costs then output may decrease.

What is the first advantage of specialisation and trade? Complete the statement below.The Theory of Comparative Advantage says that specialisation and trade leads to an increase in global    which will increase living

A second disadvantage of specialisation and trade is that it may lead to    on imports and exports. One country that is now attempting to diversify their economy is   .

2. Which statement is true? a. To realise the gains from trade, parties specialise in producing the good in which they have an absolute advantage. b. To realise the gains from trade, parties specialise in producing the good in which they are more productive. c. To realise the gains from trade, parties can specialise in any good, provided they are forced to trade with each other after production. d. To realise the gains from trade, the more productive party should specialise in producing the more costly good and the less productive party should specialise in the other good. e. To realise the gains from trade, parties should specialise in producing the good for which they are the lowest cost producer, regardless as to their absolute advantage.

If nations specialize according to their comparative advantage and engage in international trade with each other, each nation can aproduce outside its production possibilities curve bconsume outside its production possibilities curve cproduce more of all goods dshift its production possibilities curve to the right ebecome more self-sufficient

The theory of comparative advantage demonstrates that even if a country is less efficient than another in producing all goods, it can still benefit from trade by specializing in the production of the good in which it has:  A. The highest absolute advantage  B. The lowest opportunity cost  C. The highest total production  D. The lowest absolute cost