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Juan F. Amaya
on Dec 12, 2024

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Each trading nation can gain by specializing in producing those things for which it is a low-opportunity cost producer. This statement best describes the implications of the

A) free rider problem.
B) law of comparative advantage.
C) infant-industry argument.
D) law of diminishing marginal returns.

Law Of Comparative Advantage

is an economic principle that states countries (or entities) gain when they produce goods and services for which they have a lower opportunity cost, leading to more efficient global production.

Low-Opportunity Cost Producer

An entity that can produce a good or service at a lower sacrifice of alternative goods compared to others.

Trading Nation

A country whose economy heavily depends on international trade, importing and exporting goods and services as a significant portion of its gross domestic product (GDP).

  • Learn about the repercussions of specialization and trade on the global economic landscape.
  • Comprehend the positive outcomes of free trade and the drawbacks of trade restrictions.
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Kassie KovalchukDec 12, 2024
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