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Agriculture Economics QUESTION #11903
Question 1
Gains from trade between two producers arise because trade allows each to:
  • Produce beyond their own individual production possibilities frontier in consumption terms✔️
  • Eliminate the need for a production possibilities frontier
  • Avoid all opportunity costs
  • Equalize their absolute advantages
Correct Answer Explanation
Specialization and trade let each party consume combinations of goods beyond what their own PPF alone would allow.