You should specialize in the production of a good if you have
A) an absolute advantage.
B) more capital resources than your trading partner.
C) more human resources than your trading partner.
D) a comparative advantage.

Question

Quizplus · Accepted Answer

Specializing in the production of a good should be based on comparative advantage, which means producing a good at a lower opportunity cost than your trading partner. This is different from absolute advantage, which simply means being able to produce more of a good than your trading partner. Capital and human resources can contribute to a country's competitiveness, but the key factor in determining specialization is comparative advantage.

You Should Specialize in the Production of a Good If