Allowing free trade can lead to greater output because of the principle of:
A)absolute advantage.
B)rule of 70.
C)comparative advantage.
D)scarcity.

Question

Allowing free trade can lead to greater output because of the principle of:
A)​absolute advantage.
B)​rule of 70.
C)​comparative advantage.
D)​scarcity.

Quizplus · Accepted Answer

Comparative advantage is the principle that states that countries should produce and export goods that they can produce at a lower opportunity cost than other countries. This leads to specialization and greater efficiency in production, allowing for greater output and economic growth. Free trade allows countries to benefit from comparative advantage by removing trade barriers and encouraging international trade.

Allowing Free Trade Can Lead to Greater Output Because of the Principle