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Maech Sanicolas
on Nov 05, 2024

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According to the theory of comparative advantage, a country

A) exports the goods in which its has a comparative advantage.
B) imposes tariffs on goods in which it does not have comparative advantage.
C) imports the goods in which it has a comparative advantage.
D) exports goods in which it has absolute advantage.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than its competitors, leading to specialized production and trade.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, using the same amount of resources.

Tariffs

Government levies on goods and services brought into the country, frequently employed to safeguard local industries against overseas rivals.

  • Understand the basic concept of comparative advantage and how it differs from absolute advantage.
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Hargun DosanjhNov 11, 2024
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