the simple trade model demonstrates that countries can expan

the simple trade model demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage. in reality, we do not see complete specialization in production. state three reasons why this is case.

Solution

Amongst International trade models, comparative advantage model holds a special place. It states that countries participate in international trade with the production of goods in which they specialized. But in reality it is not actually that we perceive. In reality, we do not see complete specialization in production.

Three reasons that could provide rationality to the above statement are as follows: