The comparative advantage in a specific good can shift over time from one country to another because goods experience a product life cycle.

Question

Quizplus · Accepted Answer

The product life cycle theory suggests that a product goes through various stages of its life, including introduction, growth, maturity, and decline. During each stage of the life cycle, the production and consumption patterns change, leading to changes in the comparative advantage of countries producing that product. As a result, the comparative advantage in a specific good can shift from one country to another over time. Therefore, statement A is true.

The Comparative Advantage in a Specific Good Can Shift Over