According to Ricardo:
A) all countries can gain from trade if they export goods for which they have an absolute advantage.
B) one country can gain from trade only at the expense of another country.
C) all countries can gain from trade if they export goods for which they have a comparative advantage.
D) all countries lose from international trade.

Question

Quizplus · Accepted Answer

Ricardo's theory of comparative advantage states that all countries can benefit from international trade if they specialize in producing and exporting goods for which they have a comparative advantage, even if they do not have an absolute advantage in producing those goods. This is because international trade allows countries to consume goods at a lower opportunity cost than producing those goods domestically. Therefore, choice C is the best answer.