The concept of ________ explains how trade between two countries can make each better off.
A)absolute advantage
B)comparative advantage
C)autarky
D)trade barriers

Question

Quizplus · Accepted Answer

Comparative advantage is the concept that explains how trade between two countries can make each better off. It means that each country specializes in producing goods or services in which they have a lower opportunity cost, and then trades with the other country to obtain goods or services in which they have a higher opportunity cost. This leads to increased efficiency and higher overall production, benefiting both countries.

A) Absolute advantage refers to a country's ability to produce more of a particular good or service than another country using the same amount of resources. It is not necessarily related to trade between two countries. 
C) Autarky refers to a situation of economic self-sufficiency in which a country does not trade with other countries. 
D) Trade barriers are government-imposed policies that restrict or regulate international trade. They can impede trade and reduce the potential benefits of comparative advantage.

The Concept of ________ Explains How Trade Between Two Countries