Once international trade occurs,a country with a comparative advantage in the production of a good will ________ production of the good and ________.
A) decrease; import the good
B) increase; export the good
C) not change; import the good
D) increase; import the good
E) decrease; export the good

Question

Quizplus · Accepted Answer

When a country has a comparative advantage in the production of a good, it is able to produce that good at a lower opportunity cost than another country. This means that the country can increase production of the good and still have resources left over to produce other goods. By exporting the good, the country can generate income and acquire other goods that it has a comparative disadvantage in producing. Therefore, the country with a comparative advantage in the production of a good will increase production of the good and export it.

Once International Trade Occurs,a Country with a Comparative Advantage in the Production