Asked by
Daven Babero
on Dec 11, 2024Verified
The law of comparative advantage suggests that
A) curtailing U.S. trade with other countries would make U.S. consumers better off.
B) everyone would be better off if they were self-sufficient.
C) countries will tend to import commodities that they can produce at a relatively low opportunity cost.
D) countries will tend to import commodities that they can produce at a relatively high opportunity cost.
Comparative Advantage
The ability of an individual, firm, or country to produce a particular good or service at a lower opportunity cost than others, leading to a basis for beneficial trade.
Opportunity Cost
The cost of forgoing the next best alternative when making a decision, effectively the value of the opportunity lost.
Import Commodities
Goods or services brought into one country from another for the purpose of trade.
- Become familiar with the theory of the law of comparative advantage.
- Recognize the benefits of trade and specialization.
Verified Answer
ZJ
Learning Objectives
- Become familiar with the theory of the law of comparative advantage.
- Recognize the benefits of trade and specialization.