The theory of comparative advantage exists because
A) there are too many products and services to choose from today.
B) customers are always comparing the quality of service from companies in the same industry.
C) no nation can produce all the products its people want and need.
D) free-trade agreements became the trend during the past 15 years.

Question

Quizplus · Accepted Answer

The theory of comparative advantage exists because no nation can produce all the products its people want and need. This theory states that nations can benefit from trading with each other, even if one nation can produce all goods or services more efficiently than the other nation, as long as each nation specializes in producing the goods or services for which it has the lowest opportunity cost.

The Theory of Comparative Advantage Exists Because