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Explain how through trade a country can consume at levels beyond the reach of its production...

Explain how through trade a country can consume at levels beyond the reach of its production possibilities.

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Trade means the buying and selling and goods of services , it can be domestic trade or the foreign trade i.e import export .

Now every country has its own production capability for a particular good as per its technology and other factors of production. But through the trade the country can consume beyond the reach of its production possibilities. This can be achieved through specialization.

When the country specializes in the production of one good, it should produce that good to export because it has specialization in the production of that good and should import the good in which it does not has specialization. In this way it will be able to consume that good which it cannot produce efficiently due to the lack of resources or the specialization and through the specialization it can earn huge revenues through trade and the PPF will shift rightward.

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