The table given below shows the absolute tax amounts under five different tax policies for respective income levels.Table 19.2

-The theory of comparative advantage is based on:

Question

The table given below shows the absolute tax amounts under five different tax policies for respective income levels.Table 19.2
 
-The theory of comparative advantage is based on:

Quizplus · Accepted Answer

The theory of comparative advantage is based on relative opportunity costs, which means comparing the opportunity cost of producing one good or service in terms of another good or service between two countries or parties. It suggests that a country should specialize in producing the good or service that has the lower opportunity cost for them, and trade with other countries for the goods or services that have a higher opportunity cost. The absolute tax amounts in the given table are not relevant to the theory of comparative advantage.

The Table Given Below Shows the Absolute Tax Amounts Under