According to the theory of ________, specialization and free trade will benefit all trade partners, even when some are absolutely more efficient producers than others.
A) comparative advantage
B) absolute advantage
C) social equity
D) laissez-faire

Question

Quizplus · Accepted Answer

The theory of comparative advantage explains how countries or entities can benefit from specialization and trade even if one is more efficient in producing all goods. It suggests that each should specialize in producing goods for which they have a lower opportunity cost, leading to increased overall efficiency and mutual benefits from trade.

According to the Theory of ________, Specialization and Free Trade