Question

When states specialize in producing the good that they produce best and trading for goods that other states are better at producing, they are operating according to which principle?

Answer 1

The principle that states are operating according to when they specialize in producing the good they produce best and trading for goods that other states are better at producing is called comparative advantage.

Step-by-step explanation:

The principle that states are operating according to when they specialize in producing the good they produce best and trading for goods that other states are better at producing is called the principle of comparative advantage.

Comparative advantage is the idea that states should focus on producing goods they can produce most efficiently, rather than trying to produce everything themselves. By specializing in what they do best and trading with other states, they can benefit from increased efficiency and access to a wider variety of goods.