Ricardo's theory of comparative advantage suggests that consumers in all nations can consume more if there are

Question

Quizplus · Accepted Answer

Ricardo's theory of comparative advantage argues that nations should specialize in the production of goods in which they have a lower opportunity cost and then trade with other nations. Thus, free trade without restrictions would allow each nation to produce the goods that it is most efficient at producing, leading to increased consumption and higher living standards for all involved. Trade restrictions would limit the ability of nations to specialize and trade, and therefore limit the potential gains from trade.

Ricardo's Theory of Comparative Advantage Suggests That Consumers in All