Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
C → A → B → D
B
A → C → B → D
C
C → B → A → D
D
A → B → C → D
Understanding the Answer
Let's break down why this is correct
Answer
To utilize comparative advantage in international trade, the first step is to assess the opportunity costs for different goods. This means understanding what each country gives up to produce a certain good. Next, countries will specialize in producing the goods where they have the lowest opportunity costs, which allows them to produce more efficiently. After specializing, countries will engage in trade based on these specializations, exchanging goods that they each produce efficiently. Finally, this process leads to increased overall efficiency and welfare among trading nations, as they can enjoy a greater variety of goods at lower prices.
Detailed Explanation
First, countries look at what they give up to make goods, called opportunity costs. Other options are incorrect because This suggests countries specialize before understanding their opportunity costs; This order implies trading before specialization.
Key Concepts
Comparative Advantage
International Trade
Opportunity Cost
Topic
Comparative Advantage Analysis
Difficulty
hard level question
Cognitive Level
understand
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