When nations increase production in their area of _______ and trade with each other, both sides can benefit.

Question

Quizplus · Accepted Answer

The concept of comparative advantage suggests that even if one nation is less efficient than another in the production of all goods, both can benefit from trade if they each specialize in the goods for which they have a comparative advantage (i.e., where they have the smallest opportunity cost). This principle underlies the rationale for international trade.

When Nations Increase Production in Their Area of _______ and Trade