India specializes in business process outsourcing and does this more efficiently than any other country.It buys agricultural commodities,which it produces less efficiently than outsourcing activities,from the U.S.,even though it produces these agricultural commodities more efficiently than the U.S.Which of the following theories of international trade supports India's decision to buy agricultural commodities from the U.S.?

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India's decision to buy agricultural commodities from the U.S. instead of producing them domestically is supported by Ricardo's theory of comparative advantage. According to the theory, countries should specialize in producing goods in which they have a comparative advantage (i.e., they can produce at a lower opportunity cost) and trade with other countries for goods that they produce less efficiently. In this case, India specializes in business process outsourcing, which it can produce more efficiently than agricultural commodities, while the U.S. has a comparative advantage in producing agricultural commodities. By trading, both countries can benefit from each other's specialization and increase their overall economic efficiency.

India Specializes in Business Process Outsourcing and Does This More