Which key concept underpins David Ricardo's argument supporting free trade?

Multiple choice question for The International Economy And Globalization. Select an option, then review the explanation below.

Explanation

David Ricardo's free trade theory is based on the principle of comparative advantage, which suggests that countries benefit by specializing in producing goods where they have a relative efficiency, rather than an absolute one.

Practice related questions from the same subject.

1.In which type of goods do Less Developed Countries (LDCs) typically hold a comparative advantage?
2.Why did output decline drastically in the economies undergoing transition?
3.When products are sold abroad at prices below the marginal cost of production and the marginal benefit to local consumers, which policy is most likely supporting this situation?
4.How do tariffs affect the production levels of domestic companies and the consumption habits of consumers?
5.The equilibrium exchange rate adjusts to neutralize disparities in which of the following international economic factors?

Which key concept underpins David Ricardo's argument supporting free trade?

Explanation

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