Question

What does comparative advantage have the most influence on?
capital
labor
resources
specialization

Answer 1

Comparative advantage has the most influence on **specialization**. This economic principle suggests that individuals, businesses, or countries should produce goods or services in which they have a lower opportunity cost compared to others. By specializing in the production of those goods, they can trade effectively, leading to increased overall efficiency and higher output in the economy. While capital, labor, and resources are vital factors in the production process, it is the concept of specialization — driven by comparative advantage — that primarily dictates how these resources are allocated and utilized in trade.