The notion that specialization in goods that one can produce at a low opportunity cost will make it possible for trading partners to produce a larger joint output is called
A) the law of absolute advantage.
B) the law of comparative advantage.
C) the law of production possibilities.
D) the exchange maximum principle.

Question

Quizplus · Accepted Answer

The law of comparative advantage states that countries or individuals should specialize in producing goods for which they have a lower opportunity cost, leading to increased overall efficiency and joint output in trade.

The Notion That Specialization in Goods That One Can Produce