why do people trade?

Question

i need more exact answers not just cuz me need stuff i need complex info....

Answer 1

People trade for various reasons:

1. their own country do not have the resource
2. If they do, it may cost them more to produce/manufacture it on their own and hence, resort to trade (opportunity cost is greater for them)
3. Overall output is bigger for everyone when they trade "pie is bigger for everyone"

Answer 2

People gain from trade.

Imagine if you had to produce everything you used. Car, television, and even simple things like a pencil or the cereal you eat. You wouldn't get many things done.

Other people, on the other hand, have a comparative advantage and in most cases an absolute advantage over production processes. That is, the opportunity cost of making a car for Toyota is so much lower than for you to sit there and put together the pieces.

So instead, you trade your money (which you earned presumably through a job which gives service to another person) for things you don't have an advantage in creating.

Trade makes the world globally interconnected on a micro and larger level.

Answer 3

Because otherwise no one would have anything....

Bascially you trade money for clothes, food, water etc....