According to the principle of comparative advantage, countries

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that countries should specialise in producing goods for which they have the lower opportunity cost of production as compared to their trading partners. In other words, a country should produce and export those goods for which it can produce more at a lower opportunity cost than its trading partners, while importing those goods for which it has a higher opportunity cost of production than its trading partners. This helps countries to maximise their gains from trade and mutual benefits can be realised through specialisation and trade.

According to the Principle of Comparative Advantage, Countries