Asked by Courtney Gardner on May 19, 2024
Verified
According to the theory of international trade,a nation should
A) always export goods in which is has a comparative advantage.
B) always import goods in which is has an absolute advantage.
C) always export goods in which is has an absolute advantage.
D) always import goods in which is has a comparative advantage.
International Trade
The exchange of goods and services between countries, driven by the differences in costs of production, resource distribution, and various other factors.
Comparative Advantage
The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors.
Absolute Advantage
The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.
- Gain an understanding of the core principles underlying international trade and the advantage of comparative analysis.
Verified Answer
VS
Vaibhav SinghMay 20, 2024
Final Answer :
A
Explanation :
According to the theory of international trade, a nation should always export goods in which it has a comparative advantage. This means that a country should focus on producing goods that it can produce more efficiently than other countries and import goods that it cannot produce efficiently. This allows for specialization, increased production, and overall economic efficiency.
Learning Objectives
- Gain an understanding of the core principles underlying international trade and the advantage of comparative analysis.