A product's components are manufactured in a country that can produce them at a very low cost while maintaining its quality.These components are then assembled in another country where productivity in assembly is high.This process resembles the theory of ________.
A) comparative advantage
B) mercantilism
C) the international product life cycle
D) factor proportions

Question

Quizplus · Accepted Answer

This scenario involves two countries specializing in specific stages of production based on their comparative advantages. The first country has a comparative advantage in producing components at a low cost while maintaining quality, and the second country has a comparative advantage in assembling those components efficiently. Therefore, the situation described resembles the theory of comparative advantage.

A Product's Components Are Manufactured in a Country That Can