When a nation has a comparative advantage in the production of a particular good,
A) the nation can gain from trade.
B) the comparative advantage encourages self-sufficiency.
C) the opportunity cost of producing that good is higher than that of other goods.
D) the nation tends to avoid specialization.

Question

Quizplus · Accepted Answer

A nation that has a comparative advantage in the production of a particular good can gain from trade by specializing in producing that good and trading it with other nations for goods that they may not be able to produce efficiently. This leads to greater efficiency and increased welfare for all countries involved.

When a Nation Has a Comparative Advantage in the Production