The principle of comparative advantage

Question

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The principle of comparative advantage states that total output is greatest when each product is made by the country that has the lowest opportunity cost. It suggests that countries should specialize in producing goods or services that have a lower opportunity cost relative to other countries, and then trade these goods/services with each other in order to increase their overall consumption and production. This principle explains why international trade can be mutually beneficial, even when one country has an absolute advantage in producing all goods.

The Principle of Comparative Advantage