The principle of comparative advantage:

Question

a. Explains why U.S. agriculture is losing market share.
b. Explains why 3rd world nations have nothing to contribute to world trade.
c. Explains why eliminating barriers to trade, which in effect would pool the world's resources, increases real wages to factors of production.
d. Is the sole determinant of the relative ability of nations to compete with one another.
e. Explains why developing countries should be self sufficient in food production.

Answer 1

c