To explain why some nations purchase products from abroad, even when
They have an absolute advantage in production, we have to use the
Theory of:
A)absolute advantage.
B)relative pricing.
C)comparative advantage.
D)industrial advantage.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, even if a nation has an absolute advantage in producing a particular product, it may import that product from another nation if it can produce it at a lower opportunity cost compared to other goods it can produce domestically. In other words, the nation will import the product in which it has a comparative advantage in producing. Therefore, the theory of comparative advantage explains why nations may purchase products from abroad even if they have an absolute advantage in production.

To Explain Why Some Nations Purchase Products from Abroad, Even