Suppose the United States has a comparative advantage over Mexico in producing pork.The principle of comparative advantage asserts that
A)the United States should produce more pork than what it requires and export some of it to Mexico.
B)the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico.
C)the United States should refrain altogether from producing pork and import all of what it requires from Mexico.
D)Mexico has nothing to gain from importing United States pork.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, a country should specialize in producing goods or services in which it has a lower opportunity cost compared to other countries, and then trade with other countries to obtain the goods or services that it cannot produce efficiently. Therefore, if the United States has a comparative advantage over Mexico in producing pork, it should produce more pork than what it requires and export some of it to Mexico, while importing other goods or services that Mexico can produce more efficiently. This way, both countries can benefit from trade, and overall efficiency and welfare can increase.

Suppose the United States Has a Comparative Advantage Over Mexico