Use the following to answer questions:
Figure: Comparative Advantage
-When countries produce those goods for which they have a comparative advantage:
A) total production and consumption will increase in all countries.
B) trade will increase, but production will decrease.
C) at least one country will be worse off; maximizing production comes from producing those goods for which they have the absolute advantage.
D) they are maximizing their opportunity costs.

Question

Use the following to answer questions:
Figure: Comparative Advantage 
-When countries produce those goods for which they have a comparative advantage:
A) total production and consumption will increase in all countries. 
B) trade will increase, but production will decrease. 
C) at least one country will be worse off; maximizing production comes from producing those goods for which they have the absolute advantage. 
D) they are maximizing their opportunity costs.

Quizplus · Accepted Answer

When countries produce goods for which they have a comparative advantage, they can trade to increase total production and consumption, benefiting all countries involved.

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