The law of comparative advantage indicates that
A) specialization and exchange will permit trading partners to maximize their joint output.
B) a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods.
C) a nation can gain from trade only when its trading partners are not low-wage countries.
D) countries should export products for which they are high-opportunity cost producers.

Question

Quizplus · Accepted Answer

The law of comparative advantage suggests that countries should specialize in producing goods for which they have a lower opportunity cost, allowing for increased overall efficiency and joint output through trade.

The Law of Comparative Advantage Indicates That