The principles of comparative advantage and specialization apply to trade between countries.

Question

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The principles of comparative advantage and specialization imply that countries should specialize in producing goods in which they have a lower opportunity cost, and then trade those goods for other products that they could produce but with a higher opportunity cost. This trade leads to greater efficiency, production, and income for countries, and is a fundamental concept in international trade theory.

The Principles of Comparative Advantage and Specialization Apply to Trade