According to the principle of comparative advantage, countries
A) should specialize in the production of goods that they enjoy consuming.
B) with a comparative advantage in the production of every good need not specialize.
C) should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners.
D) should specialize in the production of goods for which they use fewer resources in production than their trading partners.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that countries should specialize in producing goods that they can produce at a lower opportunity cost than their trading partners. This means that they should produce the goods for which they give up the least amount of other goods in order to produce them. By specializing in these goods and then trading with other countries who specialize in producing goods with different comparative advantages, each country can benefit from trade and consume a greater variety of goods at a lower cost.

According to the Principle of Comparative Advantage, Countries