Home / Aptitude Tests / Economics / According to the the...

According to the theory of comparative advantage speciali...

According to the theory of comparative advantage specialization will result in

A.

Labour-intensive method of production

B.

Capital-intensive method of production

C.

Efficient allocation of resources

D.

Efficient distribution of output

Correct answer is C

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.