Economic theory states that losing comparative advantage in one good means creating a comparative advantage in another.This suggests that:
A) those who experience the transition may find it difficult in the short run.
B) it can be seen as a success in the short run.
C) outsourcing will always be good for every member of a society.
D) in the long run people may not like it, but no one will complain in the short run.

Question

Quizplus · Accepted Answer

Losing comparative advantage in one good may lead to a loss of jobs and income in the short run, which can be difficult for individuals and communities. While it may create comparative advantage in another good in the long run, there may be a period of adjustment and difficult transition. Therefore, it is not necessarily seen as a success in the short run and outsourcing is not always good for every member of a society.

Economic Theory States That Losing Comparative Advantage in One Good