What economic principle refers to the way that states differ in their abilities to produce certain goods because of differences in natural resources, labor force characteristics, technology, and other such factors?
Correct answer: D. comparative advantageTake Economics Courses
- A. consumer economics
- B. Freedman economics
- C. Keynesian economics
- D. comparative advantageTake Economics Courses
Explanation
Comparative advantage explains why countries specialize according to their relative efficiency in producing different goods, based on resources, labour, technology, and other conditions. It is the central economic rationale for mutually beneficial trade.
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