Questions
Questions

MGF2351 - S2 2025 Week 5 Quiz

Single choice

Which of the following theories argues that countries should specialise in the production of those goods they produce most efficiently, and buy goods that they produce less efficiently from other countries (even if this means buying goods from other countries that they could produce more efficiently at home)

Options
A.a. Mercantilism
B.b. New trade theory
C.c. Absolute advantage
D.d. Comparative advantage
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Step-by-Step Analysis
Let’s parse the core idea in the question. The statement describes a country focusing on producing goods it can make most efficiently and importing goods it makes less efficiently, even if it could produce everything more efficiently at home. This is the classic description of comparative advantage, which emphasizes relative efficiency differences and benefits from trade even wh......Login to view full explanation

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