According to Ricardo,a country will have a comparative advantage in the product in which its:
A) Labor productivity is relatively low
B) Labor productivity is relatively high
C) Labor mobility is relatively low
D) Labor mobility is relatively high

Question

Quizplus · Accepted Answer

According to Ricardo's theory of comparative advantage, a country will have a comparative advantage in the product in which it has a relatively high labor productivity. This means that the country can produce more output per unit of labor input compared to other countries. Therefore, it can produce the product at a lower opportunity cost and hence, can specialize in it and trade with other countries for goods in which they have a comparative advantage.

According to Ricardo,a Country Will Have a Comparative Advantage in the Product