Which of the following is a benefit of international trade?

• A. It prevents any domestic industries from facing competition.
• B. It allows countries to specialize in goods for which they have a comparative advantage.
• C. It always leads to equal income distribution within countries.
• D. It eliminates all transportation costs between countries.

Answer: (B)

Verified step by step guidance

1. Understand the concept of comparative advantage, which means that a country can produce certain goods at a lower opportunity cost than other countries.
2. Recognize that international trade allows countries to specialize in producing goods where they have a comparative advantage, leading to more efficient global production.
3. Note that specialization and trade enable countries to consume beyond their own production possibilities frontier, increasing overall welfare.
4. Identify that the other options are incorrect because international trade does not prevent competition, does not guarantee equal income distribution, and does not eliminate transportation costs.
5. Conclude that the main benefit of international trade is specialization based on comparative advantage, which improves efficiency and gains from trade.