The basic theory of comparative advantage implies that trade will be **interindustry** in nature.

### Explanation
Comparative advantage suggests that countries or entities should specialize in the production of goods and services for which they have a lower opportunity cost and then trade for the goods and services that they need. This results in interindustry trade, where different industries trade goods with each other.

For example, if Country A has a comparative advantage in producing agricultural products while Country B has a comparative advantage in manufacturing electronics, they will trade these distinct products. In contrast, intra-industry trade involves trading similar kinds of goods within the same industry, which is more prevalent in differentiated markets where products may vary slightly (like different models of cars).

Thus, the comparative advantage theory fundamentally supports interindustry trade as it emphasizes the benefits of specialization between different industries.

Question

The basic theory of comparative advantage implies that trade will be **interindustry** in nature.

### Explanation
Comparative advantage suggests that countries or entities should specialize in the production of goods and services for which they have a lower opportunity cost and then trade for the goods and services that they need. This results in interindustry trade, where different industries trade goods with each other.

For example, if Country A has a comparative advantage in producing agricultural products while Country B has a comparative advantage in manufacturing electronics, they will trade these distinct products. In contrast, intra-industry trade involves trading similar kinds of goods within the same industry, which is more prevalent in differentiated markets where products may vary slightly (like different models of cars).

Thus, the comparative advantage theory fundamentally supports interindustry trade as it emphasizes the benefits of specialization between different industries.

Knowee AI · Accepted Answer

The basic theory of comparative advantage implies that trade will be **interindustry** in nature.

### Explanation
Comparative advantage suggests that countries or entities should specialize in the production of goods and services for which they have a lower opportunity cost and then trade for the goods and services that they need. This results in interindustry trade, where different industries trade goods with each other.

For example, if Country A has a comparative advantage in producing agricultural products while Country B has a comparative advantage in manufacturing electronics, they will trade these distinct products. In contrast, intra-industry trade involves trading similar kinds of goods within the same industry, which is more prevalent in differentiated markets where products may vary slightly (like different models of cars).

Thus, the comparative advantage theory fundamentally supports interindustry trade as it emphasizes the benefits of specialization between different industries.

The basic theory of comparative advantage implies that trade will be Blank______-industry in nature.Multiple choice question.interintra

Question

The basic theory of comparative advantage implies that trade will be Blank______-industry in nature.

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Explanation

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