According to the comparative advantage principle, what matters most is the absolute cost of production of the product and not the relative efficiency with which a country can produce the product.

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that what matters is the relative efficiency or opportunity cost of production, not the absolute cost. It posits that countries should specialize in producing goods for which they have a lower opportunity cost, leading to more efficient global production and trade.

According to the Comparative Advantage Principle, What Matters Most Is