Which of the following factors explains the need for international trade I. variation in technology II. uniformity in taste of goods III. language barrier I...

Which of the following factors explains the need for international trade

I. variation in technology
II. uniformity in taste of goods
III. language barrier
IV. difference in natural resources

Answer Details

The need for international trade arises from various factors, including differences in technology, tastes, natural resources, and economies of scale. In particular, differences in natural resources can create a need for international trade. Countries with an abundance of certain natural resources, such as oil or minerals, can benefit from exporting those resources to countries that do not have them, while importing other goods that they need. This allows each country to specialize in the production of goods that they are relatively more efficient at producing, leading to increased efficiency and lower costs. On the other hand, uniformity in taste of goods does not necessarily explain the need for international trade. If all countries had the same taste preferences for goods, then it would reduce the need for trade as each country could produce and consume the same goods. However, in reality, there are significant differences in taste preferences among consumers in different countries, which creates opportunities for trade by allowing each country to specialize in producing goods that are in high demand elsewhere. Therefore, the only option that correctly identifies a factor that explains the need for international trade is I and IV only.