If trade between nations is prohibited, which of the following is most likely to occur?

• A. International competition will lead to lower domestic prices.
• B. Consumers will have access to a greater variety of goods at lower prices.
• C. Global production efficiency will increase.
• D. Countries will be unable to specialize according to their comparative advantage.

Answer: (D)

Verified step by step guidance

1. Understand the concept of comparative advantage: It means that countries specialize in producing goods for which they have a lower opportunity cost compared to other countries.
2. Recognize that when trade is allowed, countries can specialize based on their comparative advantage, leading to more efficient global production and mutual benefits.
3. Analyze the impact of prohibiting trade: Without trade, countries cannot specialize efficiently, which reduces overall production efficiency and variety of goods available to consumers.
4. Evaluate the given options in the problem by comparing them to the effects of trade prohibition, focusing on how trade restrictions prevent specialization and reduce economic gains.
5. Conclude that the most likely outcome of prohibiting trade is that countries will be unable to specialize according to their comparative advantage, which aligns with the correct answer.