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WAEC Economics 2007 Question 44

Question 44

International Trade

International trade depends on the concept of

  1. A.marginal cost advantage
  2. B.comparative cost disadvantage
  3. C.comparative cost advantage
  4. D.absolute cost.
Show the answer and explanation

Answer: C (comparative cost advantage)

Explanation

Countries gain from trade by specialising where they have a comparative cost advantage.