Comparative advantage arises because

Question

Quizplus · Accepted Answer

Comparative advantage arises because not all resources are equally effective in the production of goods. This means that one country may have a lower opportunity cost for producing a certain good, while another country may have a lower opportunity cost for producing a different good. By specializing in the good for which they have a lower opportunity cost, countries can trade with each other and both benefit from the exchange.

Comparative Advantage Arises Because