Based on the theory of comparative advantage,nations maximize their well-being when they
A)create more jobs.
B)allocate resources more efficiently.
C)increase trade surpluses.
D)increase exports.

Question

Quizplus · Accepted Answer

The theory of comparative advantage argues that nations should specialize in producing the goods and services that they can produce more efficiently than other countries. By doing so, they can allocate their resources more efficiently and increase their overall well-being. This does not necessarily mean creating more jobs, increasing trade surpluses or increasing exports, although those outcomes may happen as a result of specialization and efficient resource allocation.

Based on the Theory of Comparative Advantage,nations Maximize Their Well-Being