According to the theory of comparative advantage, a country gains from foreign trade even though it may have an absolute advantage in the production of all products because

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economies of scale will reduce cost

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workers become more efficient through specialization

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the country will forgo producing its less efficient output in order to produce its more efficient output

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there will be more incentive to develop cost-saving technologies

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According to the theory of comparative advantage, a country gains from foreign t...

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