A nation can gain from international trade when the relative domestic prices of the nation differs from that in other countries, and it imports goods for which it is a high opportunity cost producer.

Question

Quizplus · Accepted Answer

This statement is true according to the theory of comparative advantage in economics. When a country imports goods that it is less efficient at producing than other countries, it can benefit from the lower prices of those goods in the global market. By focusing on producing the goods it is relatively better at making, the country can increase its overall output and living standards.

A Nation Can Gain from International Trade When the Relative