Question

When nations increase production in their area of _________________ and trade with each other, both sides can benefit. *

A. relative advantage
B. absolute advantage
C. comparative advantage
D. opportunity cost

Answer 1

When nations increase production in their area of comparative advantage and trade with each other, both sides can benefit.

Step-by-step explanation:

When nations increase production in their area of comparative advantage and trade with each other, both sides can benefit. Comparative advantage refers to a country's ability to produce a particular good at a lower opportunity cost than another country. By specializing in the production of goods in which they have a comparative advantage and trading those goods for things in which other countries have a comparative advantage, countries can increase global production and enjoy higher levels of consumption for all.

Answer 2

When nations increase production in their area of **comparative advantage** and trade with each other, both sides can benefit.