Why does the author include information about trade in the context of an introduction to economics?

• A. To show that trade always leads to equal distribution of resources
• B. To argue that trade is unnecessary in modern economies
• C. To emphasize the importance of government intervention in all markets
• D. To illustrate how voluntary exchange can increase overall economic welfare

Answer: (D)

Verified step by step guidance

1. Understand the role of trade in economics: Trade involves voluntary exchange between parties, which can lead to mutual benefits and increased overall economic welfare.
2. Recognize that the author includes information about trade to demonstrate a fundamental economic principle — that individuals and countries can gain from specializing and exchanging goods and services.
3. Note that trade does not necessarily lead to equal distribution of resources; rather, it improves efficiency and welfare by allowing parties to focus on what they do best.
4. Acknowledge that the author is not arguing that trade is unnecessary or that government intervention is always required, but instead highlighting the positive effects of voluntary exchange.
5. Conclude that the inclusion of trade in the introduction to economics serves to illustrate how voluntary exchange can increase overall economic welfare, which is a key concept in microeconomics.