The principle of comparative advantage is that total output will be greatest when each good is produced by that nation that has the lowest domestic opportunity cost.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that each country should specialize in producing the goods in which it has a lower opportunity cost than other countries, and trade with other countries for goods in which they have a higher opportunity cost. This allows for more efficient production and higher total output for all countries.

The Principle of Comparative Advantage Is That Total Output Will