Most trade is based on specialization, according to _____ advantage.

Question

Quizplus · Accepted Answer

Comparative advantage is the economic theory that suggests that countries should specialize in producing those goods or services in which they have the lowest opportunity cost (the cost of forgoing the next best alternative) of production compared to other countries. This leads to increased efficiency and productivity, and ultimately benefits all trading partners involved. Absolute advantage is the ability of one country to produce a good or service more efficiently than another country, while location and brand recognition are not directly related to the concept of trade specialization based on comparative advantage.

Most Trade Is Based on Specialization, According to _____ Advantage