Question

According to the principle of comparative advantage, worldwide output and consumption will be higher when nations specialize in the production of those goods and services
a. they can provide at a lower opportunity costs.
b. that employ the most domestic workers.
c. that will increase their foreign exchange rate by the largest amount.
d. for which their consumption taxes are lowest.

Answer 1

Answer: According to the principle of comparative advantage, worldwide output and consumption will be higher when nations specialize in the production of those goods and services  "a. they can provide at a lower opportunity costs."

Explanation: The comparative advantage is the ability of a country to produce a good using relatively less resources than another. The theory of comparative advantages says that Each country in question will specialize in what is most efficient. At the same time, it will import the rest of the products in which they are most ineffective in terms of production. Although a country does not have an absolute advantage in producing any good, it may specialize in those goods in which it finds a greater comparative advantage and finally be able to participate in the international market.