Under international free trade, countries shift production toward their areas of comparative advantage.

Question

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This is a foundational principle in international economics known as the theory of comparative advantage. According to this theory, countries will specialize in producing the goods and services where they have the lowest opportunity cost, and then trade with other countries for the goods and services they cannot produce as efficiently. This leads to increased efficiency and overall welfare for all countries involved in the international trade.

Under International Free Trade, Countries Shift Production Toward Their Areas