JAMB - Economics (2009 - No. 30)

According to the theory of comparative advantage specialization will result in
labour-intensive method of production
capital-intensive method of production
efficient allocation of resources
efficient distribution of output

Explanation

The theory of comparative advantage simply explains what a country would do best while also giving up the least.

It is an economy's ability to produce a particular good or service at a lower opportunity cost than its trading partners. With this, the economy will enjoy resource allocation optimization and efficiency.

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