In discussing trade, it is ____ that matters rather than ____.
A)absolute advantage; elastic advantage
B)comparative advantage; absolute advantage
C)entire advantage; comparative advantage
D)elastic advantage; entire advantage
E)declarative advantage; absolute advantage

Question

Quizplus · Accepted Answer

The concept of comparative advantage is what matters in trade. Comparative advantage refers to a situation where a country can produce a certain good at a lower opportunity cost than another country. This means that even if a country is not the most efficient producer of a particular good, it can still benefit from trading with another country because it can produce a different good at a lower opportunity cost. Absolute advantage, on the other hand, simply refers to a situation where one country is more efficient at producing a particular good than another country. While absolute advantage can be a factor in trade, it is not as important as comparative advantage.

In Discussing Trade, It Is ____ That Matters Rather Than