The principal concept behind comparative advantage is that a nation should:

Question

Quizplus · Accepted Answer

Comparative advantage theory suggests that a country should specialize in and export the goods and services in which it has the lowest opportunity cost of production, and import those goods and services in which it has a comparatively high opportunity cost of production. This allows the country to maximize its overall welfare and economic growth by exploiting its resources and factors of production efficiently. It does not involve comparing trade volumes or implementing protectionist policies like tariffs and quotas, nor does it aim for complete self-sufficiency. Therefore, choice C is the best answer.

The Principal Concept Behind Comparative Advantage Is That a Nation