International trade based on the principle of comparative advantage creates a more eﬃcient
allocation of world economic resources.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that countries should specialize in producing and exporting goods in which they have a lower opportunity cost compared to other countries, and import goods in which they have a higher opportunity cost. By doing so, countries can produce more and use their resources more efficiently. This leads to a more efficient allocation of world economic resources, as each country can focus on producing goods in which they excel and have a natural advantage, while still having access to a wide variety of goods from other countries. Therefore, the statement is true.

International Trade Based on the Principle of Comparative Advantage Creates