If a nation begins to trade, it will wish to buy (import) the product for which its own relative price is:
A) lower than other nations.
B) higher than other nations.
C) the same as other nations.
D) less than 10% of the value of other nations.

Question

Quizplus · Accepted Answer

A nation will wish to import products for which its own relative price is higher than other nations, as it can obtain these goods more cheaply from abroad than it can produce them domestically. This is based on the principle of comparative advantage.

If a Nation Begins to Trade, It Will Wish to Buy