Dynamic comparative advantage is a result of
A) autarky.
B) learning- by- doing.
C) increasing opportunity cost.
D) absolute advantage.

Question

Quizplus · Accepted Answer

Dynamic comparative advantage arises from learning-by-doing. As an economy produces more of a particular good, labor productivity tends to increase, and the economy becomes more efficient in producing that good over time, leading to a lower opportunity cost of producing that good compared to other goods. This process of learning by doing is the basis of dynamic comparative advantage. Autarky refers to a situation in which an economy does not engage in international trade. Increasing opportunity cost is a concept related to static comparative advantage, where the economy chooses to produce the goods in which it has the lowest opportunity cost. Absolute advantage refers to an economy's ability to produce a good more efficiently than another economy.

Dynamic Comparative Advantage Is a Result of