Explain the Principle of Comparative Advantage

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The Answer is The principle of comparative advantage states that as long as the relative opportunity costs of producing goods (what must be given up in one good in order to get another good) differ among countries, then there are potential gains from trade. Nations should specialize in producing the products for which they have the lowest opportunity costs. However, the principle of comparative advantage does not tell us how the gains from trade will be distributed among producers, consumers, and traders.

Explain the Principle of Comparative Advantage

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