Countries tend to have a comparative disadvantage in and import goods:
A) that employ the country's scarce resource.
B) that employ the country's relatively abundant resource.
C) that the other country has in abundance.
D) that the other country copies.
E) with a low K/L ratio.

Question

Quizplus · Accepted Answer

Countries tend to have a comparative disadvantage in goods that require resources which are scarce in their country, leading them to import these goods. Comparative advantage theory suggests that countries will specialize in producing goods that utilize their abundant resources more efficiently and import goods that require resources they lack.

Countries Tend to Have a Comparative Disadvantage in and Import