The principle of comparative advantage essentially states that
A)there are some goods for which the opportunity costs of production are the same regardless of who produces them.
B)some goods have high opportunity costs and low absolute costs.
C)specialization can reduce output rather than increasing it.
D)total output of an economic system is greatest when each good is produced by those who have the lowest opportunity cost of producing the good.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that total output of an economic system is greatest when each good is produced by those who have the lowest opportunity cost of producing the good. This means that countries should specialize in producing goods in which they have a comparative advantage (meaning they can produce the good at a lower opportunity cost) and trade with other countries to obtain goods that they do not have a comparative advantage in. This leads to a more efficient allocation of resources and increased total output.

The Principle of Comparative Advantage Essentially States That