According to international trade theory
A) trade is based on absolute advantage.
B) comparative advantage is based on absolute advantage.
C) every country has a comparative advantage in something.
D) less developed countries cannot trade successfully with developed countries.

Question

Quizplus · Accepted Answer

According to international trade theory, every country has a comparative advantage in something. This means that a country can produce a certain good or service at a lower opportunity cost compared to other countries, making it more efficient to trade and specialize in that particular good or service. Trade is based on comparative advantage, not absolute advantage, as even if one country has an absolute advantage in producing all goods, there are still gains from trade based on comparative advantage. Trading between developed and less developed countries can also be successful if they specialize in areas where they have a comparative advantage.

According to International Trade Theory