Even if the United States is more efficient in the production of everything than China, both countries will benefit from their bilateral trade by specializing in what each
Country can produce relatively more efficiently. This statement is an example of
Which economic theory?
A) relative cost advantage
B) supply and demand
C) concentric advantage
D) comparative advantage
E) constructive advantage

Question

Quizplus · Accepted Answer

The statement given in the question is an example of comparative advantage. This economic theory suggests that countries can benefit from trade by specializing in the production of goods and services in which they have a lower opportunity cost compared to other countries. By specializing in the production of such goods and services, both countries can achieve a higher level of economic efficiency and overall welfare.

Even If the United States Is More Efficient in the Production