Countries benefit from trade by importing goods in which their opportunity costs are relatively _____ and exporting goods in which their opportunity costs are relatively _____.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, countries benefit from trade by importing goods in which their opportunity costs (the value of the next best alternative foregone) are relatively high and exporting goods in which their opportunity costs are relatively low. This leads to specialization and increased efficiency in production, ultimately resulting in higher output and greater economic welfare for all countries involved in the trade. Therefore, the best choice is D - high opportunity cost imports and low opportunity cost exports.

Countries Benefit from Trade by Importing Goods in Which Their