Q, Should a nation tend to export or import goods for which it has a comparative advantage? Explain. Why do economists oppose policies that restrict trade among nations?
According to the Ricardian theory, a country must specialize in the production of the good in which it has a comparative advantage. Thus, if the country specializes in the production of such a good, it exports the good in exchange for other goods in trade. Therefore, a nation tends to export goods in which it has a comparative advantage and import those goods in which it has a comparative disadvantage.
Trade enhances the overall consumption of economies. Through trade, an economy can consume outside its production possibilities frontier i.e., it can consume more than what it can consume in autarky(without trade). Therefore, economists oppose such policies which restrict trade among nations as such policies tend to limit the consumption of economies.
Q, Should a nation tend to export or import goods for which it has a comparative...