According to the theory of ________, trade is still beneficial even if one country is less efficient in the production of two goods, as long as it is less inefficient in the production of one of the goods.

Question

Quizplus · Accepted Answer

The theory of comparative advantage states that it is still beneficial to trade even if one country is less efficient in producing two goods, as long as it is less inefficient in the production of one of the goods. This theory suggests that countries should specialize in producing goods in which they have a comparative advantage (i.e. the lowest opportunity cost of production) and then trade with other countries to obtain goods in which they have a comparative disadvantage.

According to the Theory of ________, Trade Is Still Beneficial