A nation's comparative advantage
A)can almost always be traced to its natural resources
B)is often based on its natural resources
C)is often based on barriers to international trade
D)is reflected in the shape of its demand curve for imported goods
E)is a result of increasing marginal returns

Question

Quizplus · Accepted Answer

A nation's comparative advantage is often based on its natural resources, but it can also be based on other factors such as labor skills, technological expertise, and economies of scale. Natural resources can play a significant role in determining a nation's comparative advantage, but they are not the only factor.

A Nation's Comparative Advantage