Question

Specialization according to comparative advantage means that a country is producing the goods:

a) For which it has a relatively low opportunity cost.
b) That it wants to consume.
c) That it can produce at zero cost.
d) For which it has a relatively high opportunity cost.

Answer 1

Specialization according to comparative advantage means a country produces goods for which it has a relatively low opportunity cost, resulting in increased global production and higher consumption levels for all.

Specialization according to comparative advantage means that a country produces goods for which it has a relatively low opportunity cost. This means that the country can produce those goods more efficiently and with fewer resources compared to other countries. By specializing in the production of goods in which it has a comparative advantage, a country can increase global production of all goods and services and result in higher levels of consumption for all.