International trade is based on the notion that:

Question

Quizplus · Accepted Answer

International trade is based on the idea that goods and services can be produced and exchanged more efficiently by countries with comparative advantages. The comparative advantage theory asserts that each country should specialize in producing goods and services in which it has a lower opportunity cost, and trade with other countries to obtain other goods and services at a lower cost. Goods are more mobile internationally than resources because transportation costs for products are less expensive than for resources, and products can be easily packaged and shipped. Therefore, countries can specialize in producing goods that make the best use of their resources, and trade those goods with other countries.

International Trade Is Based on the Notion That