The theory of comparative advantage states that:

a. productivity rises more quickly when countries produce goods and services for which they have a natural talent.

b. productivity decreases when countries produce goods and services based on their natural resources.

c. all countries start out on an equal playing field.

d. countries that operate under a policy of isolationism have a comparative advantage

Question

Raymond Reynolds

Business

31 October, 17:28

The theory of comparative advantage states that:

a. productivity rises more quickly when countries produce goods and services for which they have a natural talent.

b. productivity decreases when countries produce goods and services based on their natural resources.

c. all countries start out on an equal playing field.

d. countries that operate under a policy of isolationism have a comparative advantage

+3

Answers (1)

Know the Answer?

Maribel Wells · Answer 1

Productivity rises more quickly when countries produce goods and services for which they have a natural talent.

Explanation:

This is the best option with the theory of comparative advantage states countries produce goods for which they have a lower opportunity cost. Having resources and talents lower the opportunities cost. When countries do this, it increases economic welfare for all.