Question

9.
How does comparative advantage lead to gains from trade between countries?

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Countries can maximize their output levels by focusing on what takes the most time and resources to produce.

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Most countries can produce anything domestically their consumers want without importing any products.

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To create a favorable trade balance, a country with nothing to export can import everything they need.

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Countries can obtain goods and services at a lower relative cost compared to producing those goods or services domestically.

Answer 1

Select the fourth option:
Countries can obtain goods and services at a lower relative cost compared to producing those goods or services domestically.

Explanation: Comparative advantage means each country specializes in producing goods with the lowest opportunity cost, then trades — enabling both to consume more than they could alone.