Comparative advantage implies that a country will
A) import those goods in which the country has a comparative advantage.
B) export those goods in which the country has a comparative advantage.
C) find it difficult to conclude free trade agreements with other nations.
D) export goods produced by domestic industries with low wages relative to its trading partners.

Question

Quizplus · Accepted Answer

Comparative advantage suggests that a country will specialize in producing and exporting goods for which it has a lower opportunity cost compared to other countries, thus B is correct. It does not necessarily imply difficulty in concluding free trade agreements or that exports are determined by domestic industries with low wages.

Comparative Advantage Implies That a Country Will