Question

1 multiple choice 4 points what is the principle that suggests each country should specialize in producing goods it can produce most readily and cheaply, and then trade those products? protective tariff trade deficit comparative advantage absolute advantage

Explanation:

• Protective Tariff: A tax on imported goods to protect domestic industries, not about specialization in production.
• Trade Deficit: Occurs when imports exceed exports, unrelated to production specialization.
• Comparative Advantage: The ability to produce a good at a lower opportunity cost than others, focusing on relative efficiency (not just "most readily/cheaply" in absolute terms).
• Absolute Advantage: The ability to produce a good more efficiently (readily/cheaply) than others. The question’s description matches absolute advantage’s definition of specializing in goods one can produce most easily/inexpensively.

Answer:

D. Absolute Advantage