The concepts of comparative advantage, specialization, and trade form a compelling argument in favor of:
A) free trade.
B) protectionism.
C) self-sufficiency.
D) only exporting goods and not importing goods.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a country to produce goods at a lower opportunity cost than its trading partner. Specialization is the process of a country focusing on producing certain goods or services. Trade allows countries to exchange goods and services to take advantage of their comparative advantages and increase their economic welfare. Free trade eliminates trade barriers and promotes specialization and trade, which in turn results in increased efficiency, higher productivity, and a wider variety of goods and services for consumers. Protectionism, self-sufficiency, and only exporting goods do not capitalize on the benefits of comparative advantage, specialization, and trade, and can lead to inefficiencies, reduced productivity, and higher prices for consumers.

The Concepts of Comparative Advantage, Specialization, and Trade Form a Compelling