Countries should specialize only in products in which they have an absolute advantage.

Question

Quizplus · Accepted Answer

Countries should specialize in products in which they have a comparative advantage, not necessarily an absolute advantage. Comparative advantage takes into account the opportunity cost of producing a good or service, while absolute advantage only looks at a country's ability to produce a good or service more efficiently than another country. Specializing in products based on comparative advantage can lead to greater economic efficiency and benefits from international trade.

Countries Should Specialize Only in Products in Which They Have