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SSC Geography QUESTION #6334
Question 1
The concept of 'comparative advantage' in international trade, developed by David Ricardo, implies countries should:
  • Specialize in producing goods they produce most efficiently in absolute terms
  • Specialize in goods where they have the lowest opportunity cost relative to other countries✔️
  • Produce everything domestically to avoid trade dependence
  • Export only technologically advanced products
Correct Answer Explanation
Comparative advantage states countries should specialize in producing goods where they have the lowest opportunity cost (what they sacrifice least to produce). Even if Country A produces everything more efficiently than Country B, both benefit from specialization and trade based on relative efficiency.