When two countries trade, total output increases when each country specializes in something in which it has its respective _____ advantage.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country to produce a particular good or service at a lower opportunity cost than another. This concept supports the idea that countries should specialize in producing goods where they have a comparative advantage, leading to increased total output when they trade.

When Two Countries Trade, Total Output Increases When Each Country