Which of the following describes the reason for international trade?

Explanation

Option A: Balance of payment. Balance of payment refers to the record of all transactions between a country and the rest of the world over a specific period. While balance of payment is related to international trade, it does not describe the reason for international trade.

Option B: Comparative cost advantage (Correct). Comparative cost advantage is the ability of a country to produce a good or service at a lower opportunity cost compared to other countries. This means that a country can produce a particular good or service more efficiently and at a lower cost than other countries. This is one of the main reasons for international trade. Countries engage in international trade to take advantage of their comparative cost advantage and exchange goods and services with other countries to benefit from specialization and increase overall economic welfare.

Option C: Absolute cost advantage. Absolute cost advantage refers to a situation where a country can produce a good or service at a lower cost compared to other countries. While absolute cost advantage can be a reason for international trade, it is not the best description of the reason for international trade.

Option D: Balance of trade. Balance of trade refers to the difference between the value of a country's exports and the value of its imports. While balance of trade is related to international trade, it does not describe the reason for international trade.

Therefore, the correct answer is Option B: Comparative cost advantage, as it best describes the reason for international trade. Countries engage in international trade to take advantage of their comparative cost advantage and increase overall economic welfare.