The theory of comparative advantage recommends

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The theory of comparative advantage recommends a country produces goods where:

1. The production possibilities line is to the right of the trading possibilities line.

2. Its cost is least in terms of alternative goods that might otherwise be produced.

3. Its absolute cost in terms of real resources used is almost kept to a minimum.

4. Its absolute money cost of production is almost kept at the maximum.

Reference no: EM13696669

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