What matters most in determining efficient distribution of production over the world is
A)absolute advantage.
B)efficiency.
C)the stock of resources.
D)comparative advantage.

Question

Quizplus · Accepted Answer

Comparative advantage refers to a situation where a country or firm can produce a good or service at a lower opportunity cost than another country or firm. This allows for gains from trade and efficient distribution of production over the world, as countries can specialize in producing the goods and services in which they have a comparative advantage and trade with others for goods and services in which they do not have a comparative advantage. Absolute advantage and the stock of resources do not necessarily determine efficient distribution, as countries may have an absolute advantage or abundant resources in a certain area but not have a comparative advantage. Efficiency is important, but it is ultimately determined by comparative advantage.

What Matters Most in Determining Efficient Distribution of Production Over