Answered step by step
Verified Expert Solution
Question
1 Approved Answer
According to the theory of comparative advantage, nations gain from trade because A) Trade makes firms behave more competitively, reducing their market power. B) All
According to the theory of comparative advantage, nations gain from trade because
A) Trade makes firms behave more competitively, reducing their market power.
B) All firms can take advantage of cheap labor.
C) Output per worker in each firm increases.
D) World output can rise when each country specializes in what its does relatively best.
E) Every country has an absolute advantage in producing something.
I put D, but the answer is E, please explain why the answer is E to me, Thank you.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started