Question

The fact that there is a surplus of goods in one location and a deficit in another is the basis of ______.

A) Comparative advantage
B) Supply and demand
C) Economic equilibrium
D) Trade balance

Answer 1

The fact that there is a surplus of goods in one location and a deficit in another is the basis of comparative advantage.

Step-by-step explanation:

The fact that there is a surplus of goods in one location and a deficit in another is the basis of comparative advantage. Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to other countries. When there is a surplus in one location, it means that the country has an advantage in producing that particular good, which allows it to export it to other countries.