________ has the comparative advantage in computers and ________ has the comparative advantage in smartphones.

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that countries should specialize in producing goods and services in which they have a lower opportunity cost than other countries. Since Smith and Ricardo cannot both have the comparative advantage in both computers and smartphones, one must have the comparative advantage in one product while the other has the comparative advantage in the other product. Ricardo is commonly associated with the theory of comparative advantage, and therefore it is likely that he has the comparative advantage in one or both of the products. Thus, C is the best answer.

________ Has the Comparative Advantage in Computers and ________ Has

Has the Comparative Advantage in Computers and Has