A country has a(n)________ in goods it can produce more efficiently than other goods.
A) absolute advantage
B) national competitive advantage
C) monopolistic advantage
D) comparative advantage

Question

Quizplus · Accepted Answer

This is a classic concept in international trade theory - comparative advantage. It implies that even if a country can produce all goods more efficiently than another country, it can still benefit from specializing in goods in which it has a lower opportunity cost of production, i.e., a lower relative efficiency disadvantage. This allows for mutually beneficial international trade between countries. Absolute advantage refers to a country's ability to produce a good with fewer resources than another country, while national competitive advantage refers to a country's ability to compete in an industry on a global scale. Monopolistic advantage is a concept from industrial organization theory that refers to a firm's ability to earn a higher profit based on its monopolistic control over intellectual property or market power.

A Country Has A(n)________ in Goods It Can Produce More