The concept of comparative advantage leads to the conclusion that:

Question

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The concept of comparative advantage suggests that countries should specialize in producing goods in which they have a lower opportunity cost, and trade with countries that have a higher opportunity cost in producing that good. Therefore, trade will benefit both countries if the relative costs of production differ in the two countries. Option A is incorrect as it ignores the concept of comparative advantage. Option C is incorrect as the elimination of tariffs can certainly help trade, but it is not necessary for beneficial trade to occur. Option D is incorrect as increased trade could potentially harm some groups in the short run, such as workers in industries that face increased competition, though the overall benefits of increased trade are generally positive in the long run.

The Concept of Comparative Advantage Leads to the Conclusion That