Question

multiple choice question
because of differences in opportunity costs, individuals and businesses

• specialize in the production of the good for which they wield a comparative advantage.
• specialize in the production of the good for which they wield an absolute advantage.
• produce as much of each good as possible.
• rarely trade with each other.

Explanation:

The core principle of comparative advantage (rooted in opportunity cost differences) states that individuals and businesses should specialize in producing the good for which they have a lower opportunity cost, i.e., a comparative advantage. This allows for mutually beneficial trade, which is the standard economic framework for this scenario.

Answer:

A. specialize in the production of the good for which they wield a comparative advantage.