Question 41
International TradeIn international trade, a country specializes in the production of a commodity or group of commodities for which it has
- A.a buoyant market
- B.plenty of raw materials
- C.the greatest relative advantage
- D.executive manpower.
Show the answer and explanation
Answer: C (the greatest relative advantage)
Explanation
By the law of comparative advantage, a country should specialise in what it produces at the lowest relative (opportunity) cost.