Countries that engage in trade will tend to specialize in goods in which they have _____ and will _____ those goods.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, countries should specialize in producing goods in which they have the lowest opportunity cost (comparative advantage) and trade those goods with other countries. By doing so, both countries can benefit by consuming a larger quantity of goods at a lower price than they would otherwise have been able to produce domestically. Therefore, countries that engage in trade will tend to specialize in goods in which they have a comparative advantage and will export those goods.

Countries That Engage in Trade Will Tend to Specialize in Goods