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Author Question: Why should an economy specialize and trade according to its marginal cost advantage or comparative ... (Read 46 times)

lilldybug07

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on: Jun 30, 2018
Why should an economy specialize and trade according to its marginal cost advantage or comparative advantage?

Question 2

In economic theory, we assume that the goal of the firm is to:
 a. maximize sales revenue.
  b. maximize market share.
  c. maximize the benefits it provides to its customers.
  d. maximize the profit.
  e. maximize the sales volume.


kswal303

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Individuals and nations should specialize and trade according to comparative advantage because it ensures an efficient use of resources and benefits both trading partners by allowing them to consume more than what is domestically produced.

Answer to Question 2

d


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