When trade is based on comparative advantage

Name: When trade is based on comparative advantage
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When trade is based on comparative advantage, both trading partners end up better off as they specialize in producing and exporting goods and services in which they have a lower opportunity cost and import goods and services in which they have a higher opportunity cost. This allows for a more efficient allocation of resources and increased production, leading to higher economic welfare for both parties.

When Trade Is Based on Comparative Advantage