According to the theory of comparative advantage, a country should specialize in producing a good that involves:
A) more inputs than those in other countries.
B) fewer inputs than those in other countries.
C) a higher opportunity cost than that of other countries.
D) a lower opportunity cost than that of other countries.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, a country should specialize in producing a good in which it has a lower opportunity cost compared to other countries. This means that the country can produce this good at a lower cost, either through using fewer inputs or being more efficient, than other countries. By specializing in this good, the country can then trade with other countries where they have a higher opportunity cost for producing the same good. This leads to mutually beneficial trade and overall welfare gains for all countries involved.

According to the Theory of Comparative Advantage, a Country Should