The principle of comparative advantage implies that
A) only wealthy countries ultimately can benefit from international trade.
B) every country can benefit from international trade.
C) we should limit the extent to which people specialize.
D) most people are harmed by trade.

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that every country can benefit from international trade by specializing in the production of goods or services that they produce more efficiently than other countries, and trading with other countries for goods and services that those other countries produce more efficiently. This leads to higher efficiency, lower costs, and higher output, ultimately benefiting all countries involved in trade.

The Principle of Comparative Advantage Implies That