a. countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners.
b. countries should specialize in the production of goods for which they use fewer resources in production than their trading partners.
c. countries with a comparative advantage in the production of every good need not specialize.
d. countries should specialize in the production of goods that they enjoy consuming.
1 answer
The correct answer is:
a. countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners.
The principle of comparative advantage suggests that countries can benefit from trade by specializing in the production of goods for which they have the lowest opportunity cost, thereby increasing overall efficiency and welfare.
