Which of the following appropriately applies the law of comparative advantage?
A) Countries with small amounts of labor relative to capital should specialize in producing labor-intensive commodities.
B) Since Mexican labor is cheaper than American labor, trade between the countries results in exploitation of American workers.
C) Since workers in countries such as the United States utilize larger amounts of capital than workers in less developed nations, trade between capital-rich and capital-poor nations results in the exploitation of labor in the less developed countries.
D) Countries that are low cost producers of agricultural products should trade those products for goods they can produce only at a high opportunity cost.

Question

Quizplus · Accepted Answer

The law of comparative advantage suggests that countries should specialize in producing goods for which they have a lower opportunity cost and trade for goods that would be more costly for them to produce.

Which of the Following Appropriately Applies the Law of Comparative