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28 March, 19:14

Comparative advantage implies that

no country should specialize completely in the production of any one good

A

every country should try to export more than it imports

B

developing countries should import raw materials and export manufactured goods

C

two countries should benefit from trade unless both have equal opportunity costs in every good

D

countries should impose tariffs to protect their domestic industries

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Answers (1)
  1. 28 March, 19:39
    0
    C. two countries should benefit from trade unless both have equal opportunity costs in every good

    Explanation:

    When a country have a comparative advantage, its cost of producing a specific product will be cheaper compared to another country.

    Let's say that there are two countries.

    Country A and Country B. Country A able to produce rice in a really low cost (opportunity cost for producing other products beside rice is higher). Country B able to produce meat in a really low cost. (opportunity cost to product other products beside meat is higher)

    When the two countries trade with one another, they'd both will be benefited. Rather than producing its own rice, it will be cheaper for country B to purchase rice from country A and vice versa.
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