Countries that engage in trade will tend to specialize in the production of goods and services in which they have ________ and will ________ these goods and services.
A)a comparative advantage; import
B)an absolute advantage; export
C)a comparative advantage; export
D)an absolute advantage; import

Question

Quizplus · Accepted Answer

This is because countries will tend to specialize in the production of goods and services in which they have a comparative advantage, meaning they can produce it at a lower opportunity cost compared to trading partners. They will then export these goods and services to other countries. It is not necessary for a country to have an absolute advantage, meaning they can produce a good or service using fewer resources, as this does not necessarily indicate where a comparative advantage lies. Additionally, it is not typical for countries to specialize in producing goods and services in which they have an absolute advantage and importing those in which they do not, as this would not maximize their gains from trade.

Countries That Engage in Trade Will Tend to Specialize in the Production