Principle of comparative advantage


The principle of comparative advantage does not provide answers to certain questions. One of those questions is as follows:

A. Do specialization and trade benefit more than one party to a trade?

B. Is it absolute advantage or comparative advantage that really matters?

C. How are the gains from trade shared among the parties to a trade?

D. Is it possible for specialization and trade to increase total output of traded goods.

E. do opportunity costs pay a role in people's decisions to specialize in certain activities?

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Microeconomics: Principle of comparative advantage
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