Most theories of comparative advantage explain trade patterns due to international differences in
A)demand conditions.
B)supply conditions.
C)demand and supply conditions.
D)tariffs.

Question

Quizplus · Accepted Answer

Comparative advantage suggests that a country will specialize in producing goods that it can produce at a lower opportunity cost than other countries. This is largely determined by differences in supply conditions such as natural resources, labor force skills, and technology. Demand conditions and tariffs may impact the demand for certain goods, but they are not the main drivers of comparative advantage.

Most Theories of Comparative Advantage Explain Trade Patterns Due to International