Comparative advantage is based on the
A) concept that some countries are superior to others.
B) concept of absolute advantage of producing goods in different countries.
C) concept of relative opportunity cost of producing goods in different countries.
D) concept that some countries are better endowed with natural resources.

Question

Quizplus · Accepted Answer

Comparative advantage is based on the concept of relative opportunity cost of producing goods in different countries. It suggests that each country should specialize in producing those goods in which it has a lower opportunity cost (i.e., gives up fewer resources in production) compared to other countries. This allows for the efficient allocation of resources and mutually beneficial trade among countries.

Comparative Advantage Is Based on the