The principle of comparative advantage implies that a country should generally specialize in producing goods for which it has:
Correct answer: A. The lowest opportunity cost
- A. The lowest opportunity cost
- B. The highest absolute cost
- C. The largest domestic market
- D. The greatest import dependence
Explanation
Comparative advantage is based on relative opportunity cost, not necessarily on producing a good with the fewest resources in absolute terms. Specialization according to comparative advantage can create gains from international trade.
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Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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