If trade is unrestricted,countries will __________ goods in which they have a comparative advantage and __________ goods in which they do not have a comparative advantage.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, countries should specialize in producing goods in which they have a lower opportunity cost and trade with other countries for goods in which they have a higher opportunity cost. This means that countries will export goods in which they have a comparative advantage and import goods in which they do not have a comparative advantage. Therefore, the best choice is A, which states that countries will export goods in which they have a comparative advantage and import goods in which they do not have a comparative advantage.

If Trade Is Unrestricted,countries Will __________ Goods in Which They