Question

Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
a. the United States should produce more pork than what it requires and export some of it to Mexico.
b. the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico.
c. the United States should refrain altogether from producing pork and import all of what it requires from Mexico.
d. Mexico has nothing to gain from importing United States pork.

Answer 1

Answer:

d. Mexico has nothing to gain from importing United States pork.

Explanation:

The principle of comparative advantage asserts that countries (in this case Mexico) are better off importing certain goods (in this case pork), given that the opportunity cost of importing such goods are less in comparison to the production costs of manufacturing them within the country.

By definition, a country is said to have a comparative advantage over another, when they can produce a certain good or service at a lower marginal or opportunity cost.