Economics Comparative Advantage Questions
The relationship between comparative advantage and economic development is that comparative advantage can contribute to economic development. Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to other countries. When countries specialize in producing goods or services in which they have a comparative advantage, they can trade with other countries and benefit from the gains of trade. This can lead to increased productivity, efficiency, and economic growth, which in turn can contribute to overall economic development. By focusing on their areas of comparative advantage, countries can allocate their resources more efficiently and effectively, leading to increased competitiveness and economic prosperity.