According to the theory of ________,trade is 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.
A) absolute advantage
B) mercantilism
C) comparative advantage
D) factor proportions

Question

Quizplus · Accepted Answer

The theory of comparative advantage states that a country should specialize in producing and exporting goods that it can produce at a lower opportunity cost than its trading partners, even if it is less efficient overall in producing all goods. Therefore, trade can be beneficial even if one country is less efficient in the production of two goods, as long as it can produce one of the goods at a lower opportunity cost than its trading partner.

According to the Theory of ________,Trade Is Beneficial Even If