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      Question

      "Ricardo's comparative advantage theory states

      that...?"
      A countries can benefit from international trade by specializing in what they're best at and importing what they're not. Correct Answer Incorrect Answer
      B countries should specialize in producing goods where they have an absolute advantage, regardless of other countries' costs. Correct Answer Incorrect Answer
      C international trade is only beneficial if one country is more efficient in producing all goods than another. Correct Answer Incorrect Answer
      D protectionist policies, such as tariffs and quotas, are necessary to safeguard domestic industries from foreign competition. Correct Answer Incorrect Answer

      Solution

      Ricardo's comparative advantage theory states that countries can benefit from international trade by specializing in what they're best at and importing what they're not. This means a country should produce goods where it has a lower opportunity cost compared to another country, even if the other country is absolutely more efficient in all goods.

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