To an even greater degree than the theory of absolute advantage,the theory of __________ suggests that trade is a positive-sum game in which all gain.

Question

Quizplus · Accepted Answer

The theory of comparative advantage suggests that countries should specialize in producing the goods and services that they can produce at a lower opportunity cost and trade with other countries for goods and services that they cannot produce efficiently. This leads to a positive-sum game where all countries can benefit from trade.

To an Even Greater Degree Than the Theory of Absolute