Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
A)in order to consume beyond its PPF, the United States should produce more pork than what it requires and export some of it to Mexico.
B)in order to consume beyond its PPF, the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico.
C)in order to consume beyond its PPF, the United States should refrain altogether from producing pork and import all of what it requires from Mexico.
D)Mexico has nothing to gain from importing United States pork.

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that countries should specialize in producing goods for which they have a lower opportunity cost and trade with others to improve overall consumption possibilities beyond their production possibilities frontier (PPF). Since the United States has a comparative advantage in producing pork, it benefits from producing more pork than it needs and exporting the surplus to Mexico. This allows both countries to consume beyond their individual PPFs.

Suppose the United States Has a Comparative Advantage Over Mexico